# My Trading Plan/System (Beginner)



## saiter (20 February 2009)

So I've been reading quite a bit and for quite a while now and I'd like to finally head into trading. If someone can look over my plan and give me feedback that'd be great!

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*Aim:* To make enough money so that I won't have to work anymore.

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*Starting Capital:* $AUD7500
*Risk per trade:* 1%
*Commission per trade:* $6 ($12 both ways)
*Target per week:* $150 or a 2% increase per week
*Target per day:* $30 or 0.4% increase per day
*How will the profits be used?:* I've some how found a way to live off of $50 per week (I'm a uni student still living at home). The remaining $100 will be left in the account. If I manage to generate MORE than $150 per week then only $50 will be taken out and the rest will be re-invested. If I generate LESS than $150 per week then only 20% of profits will be taken. If I happen to end the week with a loss then no money will be taken.

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*What will I be trading and on what timeframe?: *I intend to go long on Australian shares at first, holding for a 1-5 day period. I'll then look into shorting stocks, the US market and finally FOREX. As for timeframes, I may trade intraday as I get more screen time.
*Which stocks do I intend to trade?: * I will be sticking to those in the ASX top 100-200.
*What systems/methods will you be using?:* 

VSA (Volume Spread Analysis)
Easy to understand, hence I feel confident using it.​
Volume based-Trend following
Still a work in progress. All it does is buy on the fourth day after three days of successively higher closes and volumes. It will short when the opposite occurs. I'm trying to get it to sell after the market goes sideways for 3 days (with either decreasing or equal volume, haven't figured this out yet). I still haven't done the Cover trigger.

```
/*Formula for Average Volume*/
y=MA(Volume,10);

/*Going Long*/
/************/
/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;
/*Sell Condition: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
Sell = (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C) AND (Ref(V,-2)>Ref(V,-1) AND Ref(V,-1)>V AND Ref(V,-2)>V);

/*Going Short*/
/*Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;*/
```

Reversals
This one was the first system that I tried to code. Needs a lot more work than the other one. I want it to buy on a reversal that spike downwards (possibly followed by upthrusts). I won't use this for shorting as I don't believe it'll be as successful as the former. Haven't figured out Sell signals yet.

```
/*This systems aims to buy on the day AFTER a reversal has occured*/
Va= MA(V, 10);

/*Entry*/
/*====================*/
/*Conditions for Upthrust Bar are just Close > Open*/
/*Conditions for Reversal Bar*/
xs=Ref((O-L)/O,-1); /*Size of the downward spike*/
xo=Ref((H-O)/H,-1); /*How close the Open is to the High*/

Buy = C>Ref(C,-1) AND Ref(O<C,-1) AND xs>=0.04 AND xo<=0.15 AND Ref(C,-2)<HHV(Close,4);

/*Exit*/
/*=====================*/
/*Conditions for length of bar*/
yl=(H-L)/H;
/*Position of close*/
yc=(H-C)/H;

Sell= O>C AND yc<=0.01 AND yl<=0.24 AND V>=1.25*Va;
```

I may end up just using Trend following system with stocks and VSA on FOREX.


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*Questions:*

Is a 2% gain per week realistic, given my starting capital?
Can I trade $7500 intraday and still have a good chance at $30 win/day?

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*Tips for other newbies that are reading*

The cheapest brokerage in AUS is belldirect @ $15 per trade
If you're okay with opening an account with Interactive Brokers then they charge $6 per trade
CONDITIONS: You need a MINIMUM of $10000 USD *HOWEVER* if you're under the age of 21 then you need a MINIMUM of $3000 USD (which is about $5000 AUD). You will also be charged a minimum of $10 USD (or $3 USD if you're under 21) for minimum account activity.​
Use the excel file attached to model gains using a system with diff. win % (see instructions)


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## prawn_86 (20 February 2009)

Saiter, 

Im not a day trader, but i dont think the starting capital is sufficient. What happens if you lose your first 10 trades? Instantly your 10% down.

Aside from that i'll leave it to others to comment. Have a search for some similar terms, a lot of people have these sort of questions etc


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## saiter (20 February 2009)

prawn_86 said:


> Saiter,
> 
> Im not a day trader, but i dont think the starting capital is sufficient. What happens if you lose your first 10 trades? Instantly your 10% down.
> 
> Aside from that i'll leave it to others to comment. Have a search for some similar terms, a lot of people have these sort of questions etc




Well in my view, 10% is 10%, whether I had $7500 or $20000, although I do have a better chance at surviving with $20000. Anyways, if I were trading a system with 30% win 70% loss, there'd be a 2.8% chance of getting 10 straight losers (0.7^10, i think). I like those odds


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## Trembling Hand (20 February 2009)

My guess is after three days of up moves on rising volume you would be better shorting. . Especially if your hold time is so short. And in this market!!


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## nunthewiser (20 February 2009)

Good luck ......it can be done 


just watch that discipline as only takes a lil slipup here and there and bye bye capital 

partly agrees with prawn re needing more capital but in same sense one has to start somewhere and if your plan is stuck to AND used with iron clad discipline you may have a good ole chance of growing it substantially

good luck and may the force be with ya 

ps agrees with TH also as this aint no market to be using bull market strategies


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## saiter (20 February 2009)

Thanks for the replies fellahs. I'm not sure if I can short on IB without equities but I'll have a look.


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## Stormin_Norman (20 February 2009)

best of luck champ!

only way to learn is to do i believe. 

you have a plan, if you stick to it you wont lose it all; and it very well may work. 

the most important thing is your money management. make sure you stick to that, even if your method is making losses.


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## Stormin_Norman (20 February 2009)

saiter said:


> Thanks for the replies fellahs. I'm not sure if I can short on IB without equities but I'll have a look.




that's why currencies are great. i dont care which way they move, as long as they move. long or short.


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## saiter (20 February 2009)

Stormin_Norman said:


> that's why currencies are great. i dont care which way they move, as long as they move. long or short.




That and the fact that I can trade them day and night. The only thing keeping me from trading FOREX is the absence of volume in the data. I'm not sure how I'd apply VSA to FOREX so I'll have to trade it using trends.


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## nunthewiser (20 February 2009)

Please ignore my previous post i was under the impression of equities not currencys 

i have no idea re forex (bullmarkets/bears)

good luck regardless


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## CanOz (20 February 2009)

saiter said:


> That and the fact that I can trade them day and night. The only thing keeping me from trading FOREX is the absence of volume in the data. I'm not sure how I'd apply VSA to FOREX so I'll have to trade it using trends.




Looks like volume to me mate:

Its basically tick volume.

Cheers,

CanOz


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## Underpants Gnome (20 February 2009)

saiter said:


> That and the fact that I can trade them day and night. The only thing keeping me from trading FOREX is the absence of volume in the data. I'm not sure how I'd apply VSA to FOREX so I'll have to trade it using trends.




The ability to trade at night was what drew me to forex initially, in fact I really only trade Tuesday and Wednesday nights now.

I started with a much smaller capital base than you and funded my IG account with a fraction of that. And I've been making consistent profits since week 1.

I trade AUD/USD using support and resistance lines; nothing else. It really does not get any simpler than that. I started that way when I came across the "No Brainer Trades" thread on Forex Factory and have since found a few other similar strategies:

No Brainer Trades blog
No Brainer Trades FF thread
Jacko's FF thread
James16 FF thread

Best of luck with it, whether you look into forex or stick with stocks. Oh, and sorry if this is getting off-topic...

P.S - I made sure I could be consistently profitable on the IG Markets demo for quite a while before I went live.

P.P.S - Not affiliated with IG at all, just happen to use them as my broker.


Edit: LOL @ all the forex traders trying to convert you!


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## Trembling Hand (20 February 2009)

Can is that esignals vol? Not really true vol. If its what i think it is its just changes in bid/ask. The value in volume is when the big numbers go through as real transactions not the changes. Big Diff? You can get FX vol if you use the GLOBEX futs that will work.

Saiter whats the back testing results for this sucker? You have back tested it? I really think you may have it ar$e about, IMHO. You have to know what to expect before you but $'s on the table. Other wise you are just guessing no?

Another thing that may be wise is drop the initial size down to 0.5% to start. Especially if your back testing doesn't show a BIG edge. You may find the reason you thought this would work was a mistake or just execution at the start needs some refinement.


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## bunyip (20 February 2009)

Saiter

My comments for what they're worth....

It would be preferable to have more than $7500 start up capital.

2% gain per week is 100% a year. Not many traders get those sort of returns, particularly not new traders.

It would be a deadly mistake to believe that three up days constitutes an uptrend, even if they're on increased volume. 
If the overall trend is down, a few days of upward price movement is very likely a precursor to a resumption of the downtrend.
This is, in fact, the core strategy in the Oliver Valez swing trading system.......three up days during a downtrend, with the third of the three preferably being a small range day, is a shorting setup as soon as price goes below the bottom of the third day.
Three down days during an uptrend, with the third day being a small range day, is a buy setup as soon as price climbs above the top of the third day.

Your 1% risk per trade is pretty good.....even 2% is OK once you get a bit more experience under your belt.

 The current market is making wild swings that are challenge even to seasoned traders. Long trades are even more challenging in this bearish, choppy market.
You've picked a tough time to start your trading career. I would suggest you trade with a demo account until this market settles down.


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## CanOz (20 February 2009)

Trembling Hand said:


> Can is that esignals vol? Not really true vol. If its what i think it is its just changes in bid/ask. The value in volume is when the big numbers go through as real transactions not the changes. Big Diff? You can get FX vol if you use the GLOBEX futs that will work.




Correct, transactional volume is how they refer to it. Its the only was to guage spot fx volume. obviously yes, the futs are the to go for real Volume. Perhaps you could use a system on the futs and trade the spot?

My system is not volume based but i use TG with esignal for charts and some of thier prop signals.

CanOz


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## Trembling Hand (20 February 2009)

Oh and since I'm pickin' the hell out of ya (only because I care)

Drop the daily profit target if you are trading EOD. Its only going to create conflict with taking stops and letting good trades run. People say trading takes discipline but then go about setting up "plans" that will cause you to be looking at the wrong thing. You have no control or idea what the next 5 trades will do & if you are trading EOD that could be the next 3 days. Your profit target should be measured in blocks of say 20 trades. Anything less and you will fall into taking trades off the table too soon. Before long your talking about discipline. Give yourself some breathing space!


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## CanOz (20 February 2009)

Heres the two charts, one with TG eSignal "volume" and one with Amibroker and Globex EUR Future volume, for comparison.

Cheers,


CanOz


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## beerwm (20 February 2009)

maybe you should backtest this system,

particularly look at how it would of done in the past 2 months.

if your expectancy is less than 1.00, you've just saved yourself a whole lot of hurt

if its above 1.00 tread cautiously, you should have the confidence to trade it considering the conditions remain the same... and give you the ability to endure your max drawdown.

-agree with dropping the profit target, atleast such a short-sited one like TH suggested.

good luck


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## saiter (20 February 2009)

Thanks for all the replies.

Regarding back testing: I can't back test the system until I get some sort of exit strategy with stops in place, otherwise amibroker holds on to losing shares, hoping that they'll eventually go up! I think I may just using a trailing stop and wait for the price to cut through that.

Regarding FX volume: Thanks for the heads up on FX futures volume. I pretty much know nothing about FX at the moment so I'll have a read first. Thanks for the links Underpants.

Regarding the trend system: This won't be a mechanical system. If it alerts me to a stock that is currently trending up whilst the underlying trend is down, then I'm not going to take that trade (unless there's nearby support, back up from volume etc.)

Regarding expected profits: To be honest, I'm not sure what to expect from this, as long as I generate some sort of income then I'll be happy 

I'll try and get some sell triggers coded and I'll post the results up.


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## Trembling Hand (21 February 2009)

saiter said:


> Regarding back testing: I can't back test the system until I get some sort of exit strategy with stops in place,




Classic!! So you haven't a clue about your trigger, what to expect as far as stats, expected size of initial stop, win rate, DD, Amount of opportunities this will trigger daily OR as bunyip & I suspect that it would be a better trigger for a opposite entry and on and on....



:afro::shake::microwave:grenade: 
What are these? just thought I would lighten my post


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## skc (21 February 2009)

At $7.5K capital, 2% risk per trade = $150, less $12 commission = $138. Shares get batted around 10-15% easily in a matter of days so your position size is probably no more than $1000 per trade. So you will probably have around 5-7 positions open at the one time, if you fully invest your capital.

One trick that is potentially useful is keep roughly your longs and shorts to the same amount. In the current market, a good (or bad) night on the US means everything goes up (or down) by 3-5% in the morning. By having a collection of longs and shorts can give you some protection against the overall market movements. It also makes prunning your loses easier as you will still see the winners within your small portfolio. Of course, this doesn't negate the fact that you got to be right on your stock picking.

In your backtesting (which I hope you will do at some stage), make sure to consider slippage in your entry and exits. That is, if three consecutive higher closes actually signaled an uptrend, prices may gap up on the 4th day's open, so being able to buy on the closing price of the 3rd day is an exercise in theory only. Same with exits


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## tcoates (21 February 2009)

Using the volume system in your first post on the ASX200 (slightly outdated)...

Feb 19, you got 24 entries (14 buy, 10 sell)
Feb 20, you got 21 entries (5 buy, 16 sell)

Looking only the closes...

between Feb 19 and Feb 20, looking at the buys only... the largest gain was 4%, and the largest loss (over 1 day) was 10%. If you were able to buy all signaled, then between these two days, you have an average loss of 3%.

Assuming you were able to enter all buys, did you have enough to buy those triggered on the 20th.

Look at the trades signaled and see if there is something that you could do to filter to weed the good from the bad???

Tim

PS. Not suggesting it is a good or bad system, but with the amount of capital, the number of signals, and current environment, might want to refine it somehow.


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## MS+Tradesim (21 February 2009)

skc said:


> That is, if three consecutive higher closes actually signaled an uptrend, prices may gap up on the 4th day's open, *so being able to buy on the closing price of the 3rd day is an exercise in theory only.* Same with exits




Actually, it's not. But you have to be there to be able to participate in the closing auction. A case in point, I have an overnight momentum system which operates by buying the close and selling the open. A perfect example was CFU the other day. I paid 0.061 on close and sold on open at 0.076. I didn't get the 160% run for the day but small consistent profits can be had through strategies like this. 



> Of course, this doesn't negate the fact that you got to be right on your stock picking.




With an actuarial approach, being "right" on stock picking is irrelevant. My system is "right" 50% of the time. But it averages about 2% a week.

*Saiter*, you can theoretically achieve what you want to achieve (depending on your exit strategy) but you are going to need to follow your rules 100%. That is what remains to be seen. However, as TH points out you have no idea if your goal is possible if you don't know how the idea will perform. Get your exits sorted, backtest, then forward test in real time for a month or two. You will collect a lot of useful info that just isn't available through back testing. And then when you use real money you'll face a new set of issues again....the ones that involve the psychology of losing/winning real money. Live trading just isn't the same as demo trading.

Good luck. Sift the advice that's been given to you. I have 5 mechanical systems - only 2 are live in the current market conditions. But all 5 would be considered "impossible" by quite a few people on this forum. Remember that those who think some thing is impossible are ignored by those who are doing it. But stay grounded...as a newbie you will learn the most when you go live.


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## Stormin_Norman (21 February 2009)

MS+Tradesim said:


> when you use real money you'll face a new set of issues again....the ones that involve the psychology of losing/winning real money. Live trading just isn't the same as demo trading.
> 
> Good luck. Sift the advice that's been given to you. I have 5 mechanical systems - only 2 are live in the current market conditions. But all 5 would be considered "impossible" by quite a few people on this forum. Remember that those who think some thing is impossible are ignored by those who are doing it. But stay grounded...as a newbie you will learn the most when you go live.




i can't reiterate those points enough.

most likely youll have to lose money to realise those however.


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## tech/a (21 February 2009)

> Saiter, you can theoretically achieve what you want to achieve (depending on your exit strategy) but you are going to need to follow your rules 100%. That is what remains to be seen. However, as TH points out *you have no idea if your goal is possible if you don't know how the idea will perform*.




More Big letters for more Big must have's.

Test and re test.
Learn how to test and learn how to evaluate those tests.
That doesnt mean trading a demo account either.
Which is just a small apect of Forward testing.


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## MS+Tradesim (21 February 2009)

Saiter,

I got bored and for the hell of it developed a simple shorting system using CFDs.

Very basic - looking for overbought on stoch along with some volume factors and close less than yesterday's close. Exit after X number of days. Start with $7500 trading only on ASX50. (whole bunch of considerations such as slippage etc. allowed for). Portfolio limit of 50%. Basically divide the other 50% and allocate no more than 25% of that to 4 signals. So max 4 positions with 12.5% total equity in each. Nb: this is NOT a %risk model.

Tested only on 2008. This is a bear market trading idea. You would get slaughtered trading this in a bull or sideways market, I think.

Some backtested stats:

Starting Capital:  $7,500.00                     
Finishing Capital:  $26,317.71                    
Maximum Equity/(Date-Time):  $21,706.18 (16/01/2009)       
Minimum Equity/(Date-Time):    -$832.26 (22/02/2008)         
Gross Trade Profit:  $33,788.49 (450.51%)          
Gross Trade Loss:   -$14,970.78 (-199.61%)        
Total Net Profit:     $18,817.71 (250.90%)          
Average Profit per Trade:  $226.72                       
Profit Factor:   2.2570                        
Profit Index:     55.69%                        
Total Transaction Cost:   $996.00                       
Daily Compound Interest Rate: 0.3044%                       
Annualized Compound Interest Rate:  203.2660% 

Winning Trades:  45 (54.22%)                   
Losing Trades:    38 (45.78%)                   
Largest Winning Trade/(Date-Time): $5,048.00 (10/11/2008)        
Largest Losing Trade/(Date-Time): -$1,906.48 (28/01/2009)       
Average Winning Trade:  $750.86                       
Average Losing Trade:   -$393.97                      
Average Win/Average Loss:  1.9059  

Maximum consecutive winning trades:  5                             
Maximum consecutive losing trades: 6                             
Average consecutive winning trades: 2.50                          
Average consecutive losing trades: 2.24  

Maximum Dollar Drawdown: $5,869.43 (20.1000%)          
Capital Peak/(Date-Time):  $29,200.18 (16/01/2009)       
Capital Valley/(Date-Time): $23,330.74 (6/02/2009)        

Absolute (Peak-to-Valley) Percent Drawdown                  
Maximum Percentage Drawdown: 20.1000% ($5,869.43)          
Capital Peak/(Date-Time):  $29,200.18 (16/01/2009)       
Capital Valley/(Date-Time): $23,330.74 (6/02/2009) 

I ran 2000 simulations of this. The worst DD was 22% and the worst result was a profit of 174%. Before you start drooling and jump in tomorrow, the point of this is to show it is certainly possible to get the returns you want but it will take a helluva lot of work to get to that stage. As someone mentioned, 2% a week is pro-trader level. This is not contradicting what I said earlier. It is possible to get these kind of returns but it takes a lot of commitment, experience, learning from mistakes, not making them again, and perseverance to get this kind of result.

Here is a sample closed trade equity chart. How would you feel in real life sitting through a drawdown from $29,500 down to $23,500? Would you give up long before the DD bottom is reached? Really think about this...how would you feel seeing $6k evaporate in a 6 trade losing streak? This resulted in 3 losing weeks in a row! What happens if you experience a losing streak straight off the bat? You have suggested the odds of a 10-loss streak is quite low. But here is a system with a win rate of 52% on this iteration and it experiences 3 streaks >= 5 losses in a row with one of them right at the start. Using different money management models will result in different returns for this particular entry/exit idea. *MM is something you should put the most thought into as it will determine whether or not you will hang around to realise the expectancy of your idea.*


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## Page (21 February 2009)

Friends, the data given here is ok but seen the world wide market their positions are unstable for the coming week.


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## nunthewiser (21 February 2009)

thanks bro


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## tech/a (21 February 2009)

Good stuff M/S


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## saiter (21 February 2009)

Trembling Hand said:


> Classic!! So you haven't a clue about your trigger, what to expect as far as stats, expected size of initial stop, win rate, DD, Amount of opportunities this will trigger daily OR as bunyip & I suspect that it would be a better trigger for a opposite entry and on and on....
> 
> 
> 
> ...




Hahaha exits would be at points where my original analysis would be incorrect:

VSA
A bar with a wide range, closing near the low and on high volume would indicate weakness and hence an exit.​
Trends
2 or 3 bars of sideways movement with average to above average volume OR where the price has broken through a recent flag.​
Reversals
Price breaking through flag or another reversal in the opposite direction​

I think I have more of a hard time coding them into amibroker, hence I can't back test the system properly. Also, I wouldn't know how to fix stops or set position size.


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## tech/a (21 February 2009)

saiter said:


> Hahaha exits would be at points where my original analysis would be incorrect:




Thats more so a hard stop.



> VSA
> A bar with a wide range, closing near the low and on high volume would indicate weakness and hence an exit.​






Actually in many many cases the exact opposite. I suggest re visiting the basics of VSA.



> [*]Trends
> 2 or 3 bars of sideways movement with average to above average volume OR where the price has broken through a recent flag.​




???


> [*]Reversals
> Price breaking through flag or another reversal in the opposite direction​




???



> I think I have more of a hard time coding them into amibroker, hence I can't back test the system properly. Also, I wouldn't know how to fix stops or set position size.





I would definately re think your exit criteria.


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## Page (21 February 2009)

Bravo!!!
It'll work I guess...
watch the market trends sharply...


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## Trembling Hand (21 February 2009)

Page you are a cryptic one.


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## beerwm (21 February 2009)

nice work there mstradesim, good read

with your exit;
Exit after X number of days.

arent you ignoring the advantages of position sizing in all this? and a maximum ammount of risk per trade, i would of thought i set % would work better in preventing heavy drawdowns,

might be missing something though,


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## MS+Tradesim (21 February 2009)

beerwm said:


> nice work there mstradesim, good read
> 
> with your exit;
> Exit after X number of days.
> ...




I typed out a reply, browser crashed and I lost it. 

Basically, tailor the MM to the strategy and objectives. IMO, one-size-fits-all money management is not the way to go. As an example I simulated my above idea with everything the same except to risk 2% of total equity on each trade to size positions. DD is about 11% and net return about 40%. Very different outcome.

I am not suggesting saiter or you or anyone use the MM model or trading idea I used above. It was simply given to demonstrate what can be achieved with $7.5k.

Have a read of TH's "Nothing to Something" thread for more evidence that big things can be achieved from modest starts - with the caveat that a new trader should not expect that kind of outcome.
https://www.aussiestockforums.com/forums/showthread.php?t=12683


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## Temjin (22 February 2009)

I would advice against attempting to trade and use the profit for living expenses. While the amount you are talking about is quite small, it is extremely psychological "taxing" to maintain (and to expect) consistent profit week after week. 

In fact, based on the second question you were asking, you do seem to focus on just that. I tell you what, forgot all about "consistent" profit because there is no such thing. I'm sure the more experienced traders here would have mentioned it. 

You need to be prepared for the massive drawn down when it inevitably comes. In fact, you mentioned you have not yet back tested the system, and do not even know how to set position sizing.

So I'm going to ignore commenting on your "entry/exit strategies" and advice you to really focus on that first before worrying about "how much profit will I get per day".


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## saiter (22 February 2009)

Thanks for all your help guys.
I'll have a look at intraday data and get some more reading done. I'll post up what I've learnt in a few weeks time.


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## Trembling Hand (22 February 2009)

saiter said:


> Thanks for all your help guys.
> I'll have a look at intraday data and get some more reading done. I'll post up what I've learnt in a few weeks time.




You don't need more reading. That's were unrealistic goals come from, you need PRACTISE. 

Back testing and sim. Only then will you see whats possible and what you need to work on. 

Or you could just keep throwing ideas around in your head and dreamin'


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## saiter (22 February 2009)

Trembling Hand said:


> You don't need more reading. That's were unrealistic goals come from, you need PRACTISE.
> 
> Back testing and sim. Only then will you see whats possible and what you need to work on.
> 
> Or you could just keep throwing ideas around in your head and dreamin'




Okay well here's the first system that's being backtested:

```
/*Variables*/
/***********/
y=MA(Volume,10); /*Formula for Average Volume*/
spread= H-L; /*Size of the spread*/
mid = L + spread/2; /*The midpoint of a bar*/


/*Going Long*/
/************/
[B]/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/[/B]
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Sell Condition #1: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
/*Sell =  (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C);*/

[B]/*Sell Condition #2: Sell on the bar with the smallest spread for the past 15 days, above average volume and a close towards the high*/[/B]
Sell = LLV(spread,15) AND V>1.5*Y AND C>mid AND HHV(C,90);

/*Going Short*/
/*Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;
Cover = ApplyStop(stopTypeTrailing, stopModePercent, 2,0) ;*/
```

Entry/exit conditions bolded. The system used a 1% stop loss and a 5% trailing stop. Only long positions were taken.

*Results of Backtest for 1/01/09 to 20/02/09
==================*
Starting capital: $7500
Ending capital: $6830.59
Net Profit: -8.93%
Total Trades: 23
Winners: 3 (13.04%) with average win of $328.36
Losers: 20 (86.96%) with average loss of $82.72
Max system %DD: -19.6%
Risk/Reward Ratio: -46.51

*Results of Backtest for 1/09/08 to 20/02/09
===================*
Starting capital: $7500
Ending capital: $8384.56
Net Profit: 11.79%
Total Trades: 64
Winners: 8 (12.5%) with average win of $903.45
Losers: 56 (87.5%) with average loss of $113.27
Max system %DD: -32.53%
Risk/Reward Ratio: 6.94

*Results of Backtest for 1/01/08 to 20/02/09
===================*
Starting capital: $7500
Ending capital: $4139.26
Net Profit: -44.81%
Total Trades: 115
Winners: 17 (14.78%) with average win of $387.65
Losers: 98 (85.22%) with average loss of $101.54
Max system %DD: -64.83%
Risk/Reward Ratio: -3.82

I thought I'd also test the system from 01/01/01 till today, but it didn't get past 30/06/2006 when I had 100% DD 

Time to make this profitable?


----------



## Trembling Hand (22 February 2009)

saiter said:


> Okay well here's the first system that's being backtested:
> 
> I thought I'd also test the system from 01/01/01 till today, but it didn't get past 30/06/2006 when I had 100% DD
> 
> Time to make this profitable?




Good one. Bet you learnt something more valuable than reading your next book?

If a system fails badly consider flipping it - long when short. It may be a winner. Like a couple suggested


----------



## MS+Tradesim (22 February 2009)

Saiter,

You might want to check your logic. I coded it for MS and backtested it in Tradesim on the ASX50. Well over half the trades, and all of them on the Long side, enter and exit on the same day.eg Long NAB 12/5/08, Close NAB 12/5/08.


----------



## saiter (22 February 2009)

Trembling Hand said:


> Good one. Bet you learnt something more valuable than reading your next book?
> 
> If a system fails badly consider flipping it - long when short. It may be a winner. Like a couple suggested




Okay well this time, I went short instead of long 
	
	



```
(short=buy and cover=sell)
```
. A 1% stop loss and 5% trailing stop was used.

*Results of Backtest from 01/01/09 to 20/02/09
=================*
Starting capital: $7500
Ending capital: $7630.86
Net Profit: 1.74%
Total Trades: 18
Winners: 2 (11.11%) with average win of $522.18
Losers: 16 (88.89%) with average loss of $57.09
Max system %DD: -10.75%
Risk/Reward Ratio: 7.83

*Results of Backtest from 01/09/08 to 20/02/09
================*
Starting capital: $7500
Ending capital: $5240.44
Net Profit: -30.13%
Total Trades: 58
Winners: 12 (20.69%) with average win of $297.43
Losers: 46 (79.31%) with average loss of $126.71
Max system %DD: -39.9%
Risk/Reward Ratio: -11.16

*Results of Backtest from 01/01/09 to 20/02/09
================*
Starting capital: $7500
Ending capital: $15328.97
Net Profit: 104.39%
Total Trades: 107
Winners: 25 (23.36%) with average win of $1039.02
Losers: 82 (76.64%) with average loss of $221.30
Max system %DD: -30.23%
Risk/Reward Ratio: 3.61

And for the fun of it, I backtested it from 01/01/01 till today and I ended up with a whopping $2.50 left in my account 

So I can turn a pretty good profit with a small win % and if the market is declining. I guess the results from the former 2 backtests were because the XAO was going sideways from 21/11/08 and still is?

I'll try working on the other two systems and see what I can pull out.


----------



## saiter (22 February 2009)

MS+Tradesim said:


> You might want to check your logic. I coded it for MS (had to make a few tweaks in translation ) and backtested it in Tradesim on the ASX50. Well over half the trades, and all of them on the Long side, enter and exit on the same day.eg Long NAB 12/5/08 - Close NAB 12/5/08.




Yup, this is happening on my scans as well. Look at the image below:


----------



## jackson8 (22 February 2009)

very interesting thread leaves a lot to think about

should any trading system be adjusted to take the current trend into account
as mentioned above a flip around would have resulted in quite a profit


----------



## saiter (22 February 2009)

jackson8 said:


> very interesting thread leaves a lot to think about
> 
> should any trading system be adjusted to take the current trend into account
> as mentioned above a flip around would have resulted in quite a profit




Yup yup. I guess then that it'd be a good idea to have a range of systems, each suited to a particular stage of the market cycle so that you can implement them when needed.


----------



## MRC & Co (22 February 2009)

jackson8 said:


> should any trading system be adjusted to take the current trend into account




Absolutely.

All your trying to do is work out how to get onto the trend and exit, or to pick a turnaround in the trend.  

If your not taking the trend into account (however you choose to define trend, some use MAs, others such as myself simply use a HH and HL or LH and LL in the main timeframe I trade), then your basically missing the entire base of which you form your strategy.


----------



## tech/a (22 February 2009)

> "What have I done wrong?"




Some more reading needed.
I think you'll also find that your entries and exits are also on the same day as they are triggered. unless you have a way of exiting intraday(And how do you know the final bar type untill close?) you should have both set at buy or sell delay of 1 bar as most EOD systems signal at the close of the day. This can dramatically alter the result of a system.

Another observation is that *none* of your sell signals conform to the condition 
'Highest close in the last 90 days".

Flipping entry to exit and V versa is poor logic.


----------



## beerwm (22 February 2009)

Your 10%-20% Win ratio might strain you.

you could be looking at drawdowns of up to 50% - depending on your risk ofcourse, but you could suffer up to 20 losses in a row- probably more - i havent done the sums.

would you continue trading with 20 losses in a row? something to consider


----------



## Stormin_Norman (22 February 2009)

jackson8 said:


> very interesting thread leaves a lot to think about
> 
> should any trading system be adjusted to take the current trend into account
> as mentioned above a flip around would have resulted in quite a profit




trend is your friend.


----------



## tcoates (22 February 2009)

What have I done wrong

Sell = LLV(spread,15) AND V>1.5*Y AND C>mid AND HHV(C,90);

Convert to something like

Sell = spread <= LLV(spread, 15) AND ... AND C >= HHV(C,90);

(Dont know if you want comparisons relative to prev. day. For example:

C > Ref(HHV(C,90), -1)

But, they might get to out at the beginning of the trend, rather that riding the trend. Depends on what you are trying to do.)
Tim


----------



## tcoates (22 February 2009)

PS. Make the changes, re-run the test and tell us the results  

Please.

Tim


----------



## saiter (22 February 2009)

tcoates said:


> What have I done wrong
> 
> Sell = LLV(spread,15) AND V>1.5*Y AND C>mid AND HHV(C,90);
> 
> ...




Holy **** that is sooooooooooo much better! Thanks for your help, testing it right now!


----------



## saiter (22 February 2009)

*Backtest results*

System in use

A stop loss of 1% with a trailing stop of 5% was used.

```
/*Variables*/
/***********/
y=MA(Volume,10); /*Formula for Average Volume*/
spread= H-L; /*Size of the spread*/
mid = L + spread/2; /*The midpoint of a bar*/


/*Going Long*/
/************/
[B]/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/[/B]
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Sell Condition #1: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
/*Sell =  (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C);*/

[B]/*Sell Condition #2: Sell on the bar with the smallest spread for the past 15 days, above average volume and a close towards the high with the bar in an uptrend.*/[/B]
Sell = spread<=LLV(spread,15) AND V>Y AND C>mid AND C>=HHV(C,5);

/*Going Short*/
/*Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;
Cover = ApplyStop(stopTypeTrailing, stopModePercent, 2,0) ;*/
```

Going long
*Backtest results from 01/01/09 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $6591.80
Net Profit: -12.11%
Trades Taken: 13
Winners: 2 (15.38%) with an average win of $415.97
Losers: 11 (84.62%) with an average loss of $158.19
Max sys. % DD: -32.47%
Risk/Reward: -21.46

*Backtest results from 01/09/08 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $7753.40
Net Profit: 3.38%
Trades Taken: 41
Winners: 9 (21.95%) with an average win of $865.62
Losers: 32 (78.05%) with an average loss of $235.54
Max sys. % DD: -40.08%
Risk/Reward: 6.13

*Backtest results from 01/01/08 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $4885.39
Net Profit: -34.86%
Trades Taken: 74
Winners: 17 (22.97%) with an average win of $482.74
Losers: 57 (77.03%) with an average loss of $189.85
Max sys. % DD: -65.94%
Risk/Reward: -2.43

Experienced 100% DD after 24/01/2008 for the period of 01/01/2001 to 20/02/2009.​
Going short
I just changed sell signals to short and buy to cover.

*Backtest results from 01/01/09 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $8083.10
Net Profit: 7.77%
Trades Taken: 4
Winners: 2 (50%) with an average win of $358.55
Losers: 2 (50%) with an average loss of $67
Max sys. % DD: -3.63%
Risk/Reward: 33.89

*Backtest results from 01/09/08 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $9512.13
Net Profit: 26.83%
Trades Taken: 7
Winners: 4 (57.14%) with an average win of $604.28
Losers: 3 (42.86%) with an average loss of $135
Max sys. % DD: -9.22%
Risk/Reward: 10.7

*Backtest results from 01/01/08 to 20/02/09
=====================*
Starting capital: $7500
Ending capital: $11327.34
Net Profit: 51.03%
Trades Taken: 26
Winners: 11 (42.31%) with an average win of $653.06
Losers: 15 (57.69%) with an average loss of $223.76
Max sys. % DD: -20.48%
Risk/Reward: 6.51

Experienced 73.71% loss from 01/01/2001 till 20/02/09​


----------



## saiter (22 February 2009)

tech/a said:


> Some more reading needed.
> I think you'll also find that your entries and exits are also on the same day as they are triggered. unless you have a way of exiting intraday(And how do you know the final bar type untill close?) you should have both set at buy or sell delay of 1 bar as most EOD systems signal at the close of the day. This can dramatically alter the result of a system.
> 
> Another observation is that *none* of your sell signals conform to the condition
> ...




Yes, I just noticed it now when I went over my code. I'll fix it and test it!


----------



## saiter (22 February 2009)

Okay, I revised the way I shorted stocks. This updated code also allows you to change the number of days used to compare the current bar to previous bars, through the "Parameters" button in "Automatic Analysis" for amibroker. This way you won't have to play around with the code if you don't want to.


```
/*Variables*/
/***********/
W= Param("Number of bars to compare low (for Covering)", 5, 0, 100); /*The number of previous bars today's close will be compared to*/
X= Param("Number of bars to compare high (for Selling)", 5, 0, 100); /*The number of previous bars today's close will be compared to*/
Y=MA(Volume,10); /*Formula for Average Volume*/
Z= Param("Number of bars to compare size of spread", 15, 0, 100); /*The number of previous bars today's spread will be compared to*/
spread= H-L; /*Size of the spread*/
mid = L + spread/2; /*The midpoint of a bar*/


/*Going Long*/
/************/
/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Sell Condition #1: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
/*Sell =  (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C);*/

/*Sell Condition #2: Sell on the bar with the smallest spread for the past 15 days, above average volume and a close towards the high with the bar in an uptrend.*/
Sell = spread<=LLV(spread,Z) AND V>Y AND C>mid AND C>=HHV(C,X);

/*Going Short*/
/*************/
/*Short Condition: Three consecutive down-thrust days with successively increasing volume*/
Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Cover Condition: Cover on bar with lowest close for X period, above average volume, small spread and with a close towards the low*/
Cover = spread<=LLV(spread, Z) AND V>Y AND C<mid AND C<=HHV(C,X);
```

*Updated Backtesting Results for the SHORT ONLY version*
Stop losses at 1% with trailing stops at 5%

*Backtest results from 01/01/09 to 20/02/09
==================*
Starting capital: $7500
Ending capital: $6231.80
Net Profit: -16.91%
Total Trades: 13
Winners: 3 (23.08%) with an average win of $334.13
Losers: 10 (76.92%) with an average loss of $227.06
Max sys. % DD: -24.54%
Risk/Reward: -46.15

*Backtest results from 01/09/08 to 20/02/09
==================*
Starting capital: $7500
Ending capital: $10141.88
Net Profit: 35.23%
Total Trades: 48
Winners: 16 (33.33%) with an average win of $1077.98
Losers: 32 (66.66%) with an average loss of $456.43
Max sys. % DD: -37.66%
Risk/Reward: 0.16

*Backtest results from 01/01/08 to 20/02/09
==================*
Starting capital: $7500
Ending capital: $11108.31
Net Profit: 48.11%
Total Trades: 86
Winners: 29 (33.72%) with an average win of $810.16
Losers: 57 (66.28%) with an average loss of $348.88
Max sys. % DD: -36.08%
Risk/Reward: 3.35​
The DD is still huge but at least its now turning a profit 

EDIT: *Tech* I still haven't implemented the delays to buying/selling/covering/shorting. How do I do this in amibroker?


----------



## tcoates (23 February 2009)

Suggest that you check out the settings that you apply. Consider the following...

1. buy on open  (next day) and sell on close (next day)
2. buy on open  (next day) and sell on open  (next day)
3. adding a percentage trailing stop (see "Stops" under "Backtester settings"
4. adding an A-bar stop
5. setting maximum stop loss as a percentage

For example, try with 5% max loss stop and 5% trailing stop and 5 bars N-day stop.

What do you get.  I ran again ASX200 from Jan 1 to today with your defaults and settings above and you

Example - Backtest ReportStatistics | Charts | Trades | Formula | Settings | 
Symbols

      Statistics
       All tradesLong tradesShort trades
      Initial capital7500.007500.007500.00
      Ending capital8633.528633.527500.00
      Net Profit1133.521133.520.00
      Net Profit %15.11 %15.11 %0.00 %
      Exposure %96.97 %96.97 %0.00 %
      Net Risk Adjusted Return %15.59 %15.59 %N/A 
      Annual Return %185.32 %185.32 %0.00 %
      Risk Adjusted Return %191.11 %191.11 %N/A 



      All trades1515 (100.00 %)0 (0.00 %)
       Avg. Profit/Loss75.5775.57N/A
       Avg. Profit/Loss %1.17 %1.17 %N/A 
       Avg. Bars Held3.003.00N/A



      Winners6 (40.00 %)6 (40.00 %)0 (0.00 %)
       Total Profit4049.974049.970.00
       Avg. Profit675.00675.00N/A
       Avg. Profit %8.56 %8.56 %N/A 
       Avg. Bars Held3.333.33N/A
       Max. Consecutive330
       Largest win1131.341131.340.00
       # bars in largest win330



      Losers9 (60.00 %)9 (60.00 %)0 (0.00 %)
       Total Loss-2916.45-2916.450.00
       Avg. Loss-324.05-324.05N/A
       Avg. Loss %-3.75 %-3.75 %N/A 
       Avg. Bars Held2.782.78N/A
       Max. Consecutive440
       Largest loss-735.16-735.160.00
       # bars in largest loss440



      Max. trade drawdown-870.47-870.470.00
      Max. trade % drawdown-8.50 %-8.50 %0.00 %
      Max. system drawdown-1771.39-1771.390.00
      Max. system % drawdown-17.02 %-17.02 %0.00 %
      Recovery Factor0.640.64N/A
      CAR/MaxDD10.8910.89N/A
      RAR/MaxDD11.2311.23N/A
      Profit Factor1.391.39N/A
      Payoff Ratio2.082.08N/A
      Standard Error588.75588.750.00
      Risk-Reward Ratio31.0731.07N/A
      Ulcer Index6.916.910.00
      Ulcer Performance Index26.0526.05N/A
      Sharpe Ratio of trades1.491.490.00
      K-Ratio0.20950.2095-1.#IND

Tim

PS. buy and sell on open next day.


----------



## tcoates (23 February 2009)

Tip #1

PS. Another tip.

What happens if you reduce number of days in spread from 15 to 10?

Hint: use the same settings as mentioned in prev post.

Tip #2

Learn to use optimizations in Amibroker to find best combination of variables.

Tim


----------



## saiter (24 February 2009)

Okay fellahs, I'm back again, this time with a slightly beefier system.


```
/*Variables*/
/***********/
T= SetOption("InitialEquity", 7500); /*Your starting capital*/
U= Param("What % of your capital are you willing to risk?", 1, 0, 100); /*The % of capital that is going to be risked per trade*/
W= Param("Number of bars to compare lowest close (for Covering)", 5, 0, 100); /*The number of previous bars today's close will be compared to*/
X= Param("Number of bars to compare highest close (for Selling)", 5, 0, 100); /*The number of previous bars today's close will be compared to*/
Y= MA(Volume,10); /*Formula for Average Volume*/
Z= Param("Number of bars to compare size of spread", 15, 0, 100); /*The number of previous bars today's spread will be compared to*/
risk= (U/100)*T; /*The $ value that is going to be risked per trade*/
spread= H-L; /*Size of the spread*/
mid= L + spread/2; /*The midpoint of a bar*/


/*Going Long*/
/************/
/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Sell Condition #1: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
/*Sell =  (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C);*/

/*Sell Condition #2: Sell on the bar with the smallest spread for the past 15 days, above average volume and a close towards the high with the bar in an uptrend.*/
Sell = spread<=LLV(spread,Z) AND V>Y AND C>mid AND C>=HHV(C,X);

/*Going Short*/
/*************/
/*Short Condition: Three consecutive down-thrust days with successively increasing volume*/
Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;

/*Cover Condition: Cover on bar with lowest close for X period, above average volume, small spread and with a close towards the low*/
Cover = spread<=LLV(spread, Z) AND V>Y AND C<mid AND C<=LLV(C,X);

/*Timing the Trades*/
/*******************/
SetTradeDelays(1,1,1,1);
BuyPrice = Open;
SellPrice = Open;
ShortPrice = Open;
CoverPrice = Open;

/*Stop Losses & Position Size*/
/*****************************/
ApplyStop(0,2,Ref(C,-1),1); /*Apply a static stop loss at yesterday's close. If triggered, exit intraday*/
ApplyStop(2,2,Ref(mid,-1),1); /*Apply a trailing stop at the middle of the previous bar. If triggered, exit intraday*/
PositionSize = risk/(C-Ref(C,-1))*BuyPrice; /*The position size*/
SetOption("MaxOpenPositions", Optimize("MaxOpenPositions", 3, 1, 10, 1)); /*The maximum number of trades open at any one time. Optimizing.*/
```

*What's New?
============*

I've added the buy/sell/short/cover delays. All trades occur on the next day's open.
I've customised the stop losses and trailing stops. Read the comments in the code.
Added position sizing

*Tcoates:* The only bit that I've used optimize in is in determining the maximum number of open positions. I thought that optimizing systems was a no no as this would just fit the system to historical data?

EDIT: Well, as soon as I added it I found a problem!  It looks like the stop losses keep moving (like a trailing stop). I need a way to keep them static! Will post a fix later.


----------



## beamstas (24 February 2009)

Good Luck 

Offtopic: Is it true that if i am ages under 21 years i can start an IB account with just 3,000 USD? This is good news!

Do they enforce the 100 trade rule?

Where did you find this information?
Thanks!


----------



## nizar (24 February 2009)

beamstas said:


> Good Luck
> 
> Offtopic: Is it true that if i am ages under 21 years i can start an IB account with just 3,000 USD? This is good news!
> 
> ...




The 100 trade rule is not enforced.
Neither is anything else.
I told them that my net worth was in the millions


----------



## saiter (24 February 2009)

beamstas said:


> Good Luck
> 
> Offtopic: Is it true that if i am ages under 21 years i can start an IB account with just 3,000 USD? This is good news!
> 
> ...




Yeah it's true. It's in the required minimums section.


----------



## saiter (25 February 2009)

Well I've finished my system after working on it for 24 hours straight! Here it is:


```
_SECTION_BEGIN("VSA");

/*Variables*/
/***********/

Cap = SetOption("InitialEquity", Param("What is your starting capital?", 7500, 0, 1000000)); 								/*Your starting capital*/
percap = Param("What is the largest size of each trade, in terms of % of equity?", Optimize("% of equity",25, 1,100,5), 1, 100, 1); /*The largest possible size of each trade in terms of % equity*/
risk= Param("What % of your capital are you willing to risk per trade?", 1, 0, 100); 											/*The % of capital that is going to be risked per trade*/
W= Param("Number of bars to compare lowest close (for Covering)", 5, 0, 100); 													/*The number of previous bars today's close will be compared to*/
X= Param("Number of bars to compare highest close (for Selling)", 5, 0, 100); 													/*The number of previous bars today's close will be compared to*/
Y= Param("Trailing stop %", Optimize("Trailing stop %",3,0.1,10,0.1),0.1,10,0.1);											 	/*The percentage to be used for the trailing stop. Can be optimized.*/
Z= Param("Number of bars to compare size of spread", 15, 0, 100); 																/*The number of previous bars today's spread will be compared to*/

spread= H-L; 				/*Size of the spread*/
mid= L + spread/2; 		/*The midpoint of a bar*/
avol= MA(Volume,10); 	/*Formula for Average Volume*/
sl_short=1+Y/100; 		/*Stop loss level for going Short*/
sl_long=1-Y/100; 			/*Stop loss level for going Long*/





/*Going Long*/
/************/
SetTradeDelays(1,1,1,1);

/*Buy Condition: Three consecutive up-thrust days with successively increasing volume*/
Buy = Ref(C,-2)<Ref(C,-1) AND Ref(C,-1)<C AND Ref(C,-2)<C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;
BuyPrice = Open;

/*Sell Condition #1: Three days where the close is sideways (+/- 5% of each other) and volume is successively decling but larger than average for the first two days*/
/*Sell =  (Ref(C,-2)<1.025*Ref(C,-1) AND Ref(C,-2)>0.975*Ref(C,-1)) AND (Ref(C,-2)<1.025*C AND Ref(C,-2)>0.975*C) AND (Ref(C,-1)<1.025*C AND Ref(C,-1)>0.975*C);*/

/*Sell Condition #2: Sell on the bar with the smallest spread for the past 15 days, above average volume and a close towards the high with the bar in an uptrend.*/
Sell = spread<=LLV(spread,Z) AND V>avol AND C>mid AND C>=HHV(C,X);
SellPrice = Open;

/*Going Short*/
/*************/
/*Short Condition: Three consecutive down-thrust days with successively increasing volume*/
Short = Ref(C,-2)>Ref(C,-1) AND Ref(C,-1)>C AND Ref(C,-2)>C AND Ref(V,-2)<Ref(V,-1) AND Ref(V,-1)<V AND Ref(V,-2)<V;
ShortPrice = Open;

/*Cover Condition: Cover on bar with lowest close for X period, above average volume, small spread and with a close towards the low*/
Cover = spread<=LLV(spread, Z) AND V>avol AND C<mid AND C<=LLV(C,X);
CoverPrice = Open;





/*Applying a trailing stop*/
/*****************************************/
SetOption("AllowSameBarExit", 1);
SetOption("ActivateStopsImmediately",1);

trailARRAY_short = Null; 														//Holds the different prices that the trailing stop has been at (SHORT)
trailstop_short = 0; 															//Trailing stop price (SHORT)


//This loop does the following tasks:
//	1. Checks to see if we're shorting on the particular day, otherwise, removes the short signal.
//			a. If a position is entered, the entry point is the Open of the NEXT DAY.
//	2. Applies the trailing stop as a percentage of the High.
//	3. Checks to see if the trailing stop has been broken by the High. If it has, the position is Covered and the trailing stop is reset.
//	4. If the High hasn't penetrated the stop, then the trailing stop moves lower.
for( i = 1; i < BarCount; i++ )
{
   if( trailstop_short == 0 AND Short[ i ] ) 								//if there is a buy signal with no trailing stop moving under it, then buy on the next day's open
   { 
		SetTradeDelays(1,1,1,1);
		ShortPrice = Open;
      	trailstop_short = High[ i ] * sl_short;
   }
   else Short[ i ] = 0; 														//remove excess short signals
   if( trailstop_short > 0 AND High[ i ] > trailstop_short )				//if the trailing stop is triggered, exit position immediately (intraday)
   {
      	Cover[ i ] = 1;
		SetTradeDelays(1,1,1,0);
      	CoverPrice[ i ] = trailstop_short;		
      	trailstop_short = 0;
   }

   if( trailstop_short > 0 AND High[ i ] < trailstop_short )				//if the trailing stop isn't triggered, move it closer
   {   
      	trailstop_short = Min(High[ i ] * sl_short, trailstop_short);
      	trailARRAY_short[ i ] = trailstop_short;
		
   }
}

	
trailARRAY_long = Null; 														//An array that holds the different prices that the trailing stop has been at (LONG)
trailstop_long = 0; 																//Trailing stop price (LONG)

//This loop does the following tasks:
//	1. Checks to see if we're buying on the particular day, otherwise, removes the buy signal.
//			a. If a position is entered, the entry point is the Open of the NEXT DAY.
//	2. Applies the trailing stop as a percentage of the Low.
//	3. Checks to see if the trailing stop has been broken by the Low. If it has, the position is Sold and the trailing stop is reset.
//	4. If the Low hasn't penetrated the stop, then the trailing stop moves higher.
for( i = 1; i < BarCount; i++ )
{
	if( trailstop_long == 0 AND Buy[ i ])										//if there is a buy signal with no trailing stop moving under it, then buy on the next day's open
	{
		SetTradeDelays(1,1,1,1);
		BuyPrice = Open;
		trailstop_long = Low[ i ] * sl_long;
	}
	else Buy[ i ] = 0; 															//remove excess buy signals
	if( trailstop_long > 0 AND Low [ i ] < trailstop_long )				//if the trailing stop is triggered, exit position immediately (intraday)
	{
		Sell[ i ] = 1;
		SetTradeDelays(1,0,1,1);
		SellPrice[ i ] = trailstop_long;
		trailstop_long = 0;
	}

	if (trailstop_long >0 AND Low[ i ] > trailstop_long )					//if the trailing stop isn't triggered, move it closer
	{
		trailstop_long = Max(Low[ i ] * sl_long, trailstop_long);
		trailARRAY_long[ i ] = trailstop_long;		
	}
}

//This sub-section plots the price and the trailing stops.
_SECTION_BEGIN("Price");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( C, "Close", ParamColor("Color", colorBlack ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() ); 
_SECTION_END();
Plot( trailARRAY_short,"SHORT - trailing", colorIndigo, styleThick );
Plot( trailARRAY_long, "LONG - trailing", colorBlue, styleThick);





/*Fixed Fractional Position Sizing*/
/**********************************/

SetCustomBacktestProc("");  													//tells amibroker that we're running our own custom backtest procedure

if (Status("action") == actionPortfolio)  									//runs the code in the second part of the backtest procedure
{
	bo = GetBacktesterObject();
	bo.PreProcess();
	for (i = 0; i<BarCount; i++) 												//cycles through all the bars
	{
		for (sig = bo.getfirstsignal(i); sig; sig = bo.getnextsignal(i)) //cycles through all the signals for the current bar
		{

			
			if (sig.IsEntry())  													//if the bar involves an entry... this is used to catch all short entries. A nested if-statement is used to catch long entries.
			{
				psize=sig.PosSize;
				
				sp = Foreign(sig.Symbol, "H");									//imports the High array for the current symbol
				spi = sp[i] * sl_short;											//uses the i-th High value to calculate the trailstop value, just like trailstop_short
				bp = Foreign(sig.Symbol, "O");									//imports the Open array for the current symbol
				bpi = bp[i];														//sets the i-th Open value

				e=bo.Equity();													//the current equity of the portfolio
				Check = (percap/100)*e;											//converts the maximum % of equity per trade into maximum $ per trade
				r=(risk/100)*e;													//maximum risk per trade
				psize=(r*bpi)/abs(bpi-spi);										//calculates the fixed fractional position size for each short entry
				if (sig.IsLong())													//if the bar involves a long entry...
				{
					sp = Foreign(sig.Symbol, "L");								//imports the Low array for the current symbol
					spi = sp[i] * sl_long;										//uses the i-th Low value to calculate the trailstop value, just like trailstop_long

					psize=(r*bpi)/abs(bpi-spi);									//sets the new position size, according to the new trailstop (ONLY FOR LONG TRADES)
				}
				if (psize>Check)													//checks if the position size calculated is greater than the maximum $ per trade. If so, position becomes the max possible $ per trade
				{
					psize=Check;
				}

				sig.PosSize=psize;
			}		
		}
		bo.ProcessTradeSignals(i);
	}
	bo.PostProcess();
}
```

*How does the system work?
=======================*

Just a trend following system
Buys after three days of successively higher closes and volume. Short is vice versa.
Sells on bars with small spread, above average volume and with a close towards the high. Cover is similar except with close towards the low.
Positions are closed by the trailing stop intraday
Uses a trailing stop of 3% (adjustable)
Capital is divided into parcels of max. 25% of original equity. Position sizes are then worked out using the fixed fractional method.


----------



## saiter (25 February 2009)

*What does the system look like?
========================*



The squiggly lines are the trailing stops. The blue line is the trailing stop for a long position and the pink line is for shorts.
The trailing stop is a percentage of the previous bar's low (if long) or high (if short), however this can be changed to some other variable within the AFL script. The % can be adjusted using the "Parameter" button in amibroker->auto analysis.

*What are the results like?
=====================*

I'm pretty pleased with the results. Its funny that they improved because of the amount of time I spent working on the trailing stop and position sizing rather than buy/short triggers.
The system traded the ASX top 200, using a trailing stop of 3% and no static stop loss.

​

Given that the XAO has been trending downwards since late 2007, losses were expected whilst going long between 01/01/2008-23/02/2009 and 01/09/2088-23/02/2009. I was surprised by the gain from 01/01/2009-23/02/2009 with all the sideways movement on the XAO.
I'm a bit skeptical about the going short result from 01/01/2009-23/02/2009. The Win% is extremely high and so is the Risk/Reward ratio. I'm assuming this is just an anomaly.
All in all, I'm quite pleased with the results, especially the avg. profit per week 


*What's next?
============*

Well, I'd like to see how this system would go in other markets, in particular the US markets, HOWEVER, I don't have any data for them.
If anyone does have access to that data it'd be much appreciated if you could post the results up.
The next system will be one for forex, probably a breakout or gapping system. Maybe this will be a bit more challenging since there's no volume. I'll post it up when I finish it for any other newbies that want an example system.


----------



## tcoates (25 February 2009)

Good that its working out for you. 

Playing devils advocate here...

In your back testing, I hope you have you taken the following into account -

1. commission and rates?

2. stocks that are (effectively) delisted. (I literally copied and pasted your script, and BNB came back as a search result - does that matter?)

Item 2 is easy to overcome... just mod your watch list.

Something which looks good may not be so if you are paying $15, $20 or $30 (ignoring IB) each time that you buy or sell.

Tim


----------



## nizar (25 February 2009)

Good work saiter.
Are you sure BLR is top200 though?
Last time I traded it (maybe 2 years ago) it was a spec.


----------



## tcoates (25 February 2009)

Nizar,



> Last time I traded it (maybe 2 years ago) it was a spec




... and still is

Tim


----------



## saiter (25 February 2009)

tcoates said:


> Good that its working out for you.
> 
> Playing devils advocate here...
> 
> ...






nizar said:


> Good work saiter.
> Are you sure BLR is top200 though?
> Last time I traded it (maybe 2 years ago) it was a spec.





I've taken commissions into account ($12 per trade w/ 0.08% commission).
I'm using the ASX amibroker database, so I assumed that the watchlist it created was top 200. I'll double check it.

EDIT: Thanks for letting me know about this. I've downloaded the ASX200 list and I'll post the proper results up


----------



## saiter (25 February 2009)

New results using proper ASX 200 list. Trailing stop at 3%, maximum risk of 1% per trade.


​


----------



## tech/a (25 February 2009)

My comment is that your shorting ystem has some potential but your long method needs some work.


----------



## MS+Tradesim (25 February 2009)

Saiter, what have you concluded so far from your results?


----------



## Trembling Hand (25 February 2009)

tech/a said:


> My comment is that your shorting system has some potential but your long method needs some work.




Or is it shorting in a down trend has potential and going long in an uptrend is hard work??


----------



## tech/a (25 February 2009)

Trembling Hand said:


> Or is it shorting in a down trend has potential and going long in an uptrend is hard work??





You mean long in a down trend?

Given his parameters no doubt!


----------



## saiter (25 February 2009)

MS+Tradesim said:


> Saiter, what have you concluded so far from your results?





The trend really is your friend
It's possible to make $150 per week with my starting capital




tech/a said:


> You mean long in a down trend?
> 
> Given his parameters no doubt!




Tighter trailing stops result in losses for long positions. Larger trailing stops result in only minor gains. The only other thing I could change would be my risk, but I'm not sure if that'd be such a good idea considering my small capital.


----------



## sinner (25 February 2009)

Hi saiter, have you considered lowering youre timeframes a bit to account for market volatility and generate more trade signals? 

3 days of rising volume and the move might already be gone by the time your system generates a signal.


----------



## nizar (25 February 2009)

Saiter, have you tried the system but with ommitting the volume data?
ie. only consider price action.

What are you observations?


----------



## saiter (25 February 2009)

sinner said:


> Hi saiter, have you considered lowering youre timeframes a bit to account for market volatility and generate more trade signals?
> 
> 3 days of rising volume and the move might already be gone by the time your system generates a signal.






nizar said:


> Saiter, have you tried the system but with ommitting the volume data?
> ie. only consider price action.
> 
> What are you observations?




I'll be testing these later tonight and I'll be using different VSA-based entry/exit triggers. I should say though that the only time this became profitable was when the trailing stops & position sizing was implemented, so I'm not sure if changes to the triggers would make that much of a difference.


----------



## saiter (2 March 2009)

Well it looks like my trading plan/system isn't going to work.

Unfortunately, as I'm under the age of 21, I'm restricted to a cash account at Interactive Brokers, meaning that I cannot short any stocks. Furthermore, I'm unable to trade FOREX as I can't switch to a margin account (underage).

Does anyone know of any other brokers that offer both FOREX and Australian stocks for a low comission?

Thanks.


----------



## Trembling Hand (2 March 2009)

saiter said:


> Well it looks like my trading plan/system isn't going to work.
> 
> Unfortunately, as I'm under the age of 21, I'm restricted to a cash account at Interactive Brokers, meaning that I cannot short any stocks. Furthermore, I'm unable to trade FOREX as I can't switch to a margin account (underage).
> 
> ...




You would find it hard to short with IB anyway. They haven't had much on their list recently.

Looks like you need a bucket shop. They are always willing to let you trade.


----------



## saiter (2 March 2009)

Trembling Hand said:


> You would find it hard to short with IB anyway. They haven't had much on their list recently.
> 
> Looks like you need a bucket shop. They are always willing to let you trade.




The only one I know of is commsec and that'd cost $20+$40 for a round trip to short. The other option is belldirect with a  $30 round trip for going long ONLY. I can't go long atm and come out positive.


----------



## Trembling Hand (2 March 2009)

saiter said:


> The only one I know of is commsec and that'd cost $20+$40 for a round trip to short. The other option is belldirect with a  $30 round trip for going long ONLY. I can't go long atm and come out positive.




No No No. Try one of the CFDs like CMC you can even short the fins


----------



## CanOz (2 March 2009)

Saiter, the markets and their opportunities will always be there. Why not take this time and trade on a simulator, perfecting your knowledge while building a war chest. 

Perhaps the difficulty in getting access to trading is a blessing for now.

Roll with it, learn some more....test some more.

Cheers,


CanOz


----------



## saiter (3 March 2009)

Trembling Hand said:


> No No No. Try one of the CFDs like CMC you can even short the fins




Haha, first I'll find out what a CFD is.



CanOz said:


> Saiter, the markets and their opportunities will always be there. Why not take this time and trade on a simulator, perfecting your knowledge while building a war chest.
> 
> Perhaps the difficulty in getting access to trading is a blessing for now.
> 
> ...




Where can you find simulators for stocks?


----------



## CanOz (3 March 2009)

saiter said:


> Haha, first I'll find out what a CFD is.
> 
> 
> 
> Where can you find simulators for stocks?




If your system is EOD then you don't even need a sim, lots of free data to forward test.

OR

Test it on a sharemarket game, like ASX.

If its FX then FXgame from Oanda.

Maybe IB will let on thier sim without an account, i'm not sure though.

Cheers,


CanOz


----------



## Stormin_Norman (3 March 2009)

IG markets lets u paper trade. cfds + indexes + fx.


----------



## beamstas (3 March 2009)

CanOz said:


> If your system is EOD then you don't even need a sim, lots of free data to forward test.
> 
> OR
> 
> ...




Im pretty sure you need an operational IB account to use their demo accounts


----------



## banjosmyth (9 March 2009)

Hi guys

I love you plan and attitude but best of all I love you budgeting skills $50 would surely take some dedication!

Great stuff and best of luck - Look forward to hearing your successes and failures as I'm sure you will have some of each.  If you persist and continually upgrade your trading plan I'm sure you will succeed in the long run

Cheers 

Banjo




What's Happening to the Stock Market???


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## roamin_oz (13 March 2009)

All i say is just jump right in. I started with 50G at the beginning of Nov '08 with little to no insight into the stock market other than its down way down on 2yrs ago and it can only go up (shortly) from here.

I'm currently up $3,500. (3 trades)

I try to make between 5-10% on a trade. I know im bad in trading by not using stops (i think they call them that) but hey... no doubt in time they recover and you can sell. Big deal if it takes 4-6 weeks to make 5-10% profit.... its not like you worked for it anyways. It's basically free money.

My only advise is dream... and dream big!  And you arent at a loss unless you sell at a loss. 

Good Luck, and wish me luck too.


----------



## tech/a (13 March 2009)

> And you arent at a loss unless you sell at a loss.




Rest assured if your liquidated holdings are less than your original capital then you are losing.

Just wander into a bank and see if they will loan against your declining capital base.

You wont last long in any business including trading unless you know how to run your P&L.


----------



## prawn_86 (13 March 2009)

roamin_oz said:


> and wish me luck too.




No offence, but your going to need a hell of a lot of it.

What happens when you get caught holding an AFG, BNB, ABS etc etc? Or even 'quality' stocks like FLT which get hammered.

Good luck...


----------



## Wysiwyg (14 March 2009)

He`s a bulldung artist.Probably had a few.


----------



## Nero64 (14 March 2009)

> No offence, but your going to need a hell of a lot of it.
> 
> What happens when you get caught holding an AFG, BNB, ABS etc etc? Or even 'quality' stocks like FLT which get hammered




Yes you are right about holding stocks that crash. You lose money. That is obvious. But you partly off set the risk by reducing your capital sizing on entry. 

You also lose money buying a car which depreciates in value. 

If you purchase a half decent stock that has a decent earnings record which pays a FF dividend of 5% you will get your money back in 10 - 20 years assuming you're a long term investor. 

Most of us have long term portfolios and have been down 40-60%. It's easy to preach capital managment but when the market is down 55% it's not so easy to practise what you preach. 

I agree that stop losses are essential when using CFD's and Forex. Leveraging on CFD's will wipe you out if you get it wrong. 

If Warren Buffet closed out of his postions when down 30% then he wouldn't be where he is today would he.


----------



## nunthewiser (14 March 2009)

tech/a said:


> Rest assured if your liquidated holdings are less than your original capital then you are losing.
> 
> Just wander into a bank and see if they will loan against your declining capital base.
> 
> You wont last long in any business including trading unless you know how to run your P&L.




BINGO


this bloke got all the answers


----------



## tech/a (14 March 2009)

> It's easy to preach capital managment but when the market is down 55% it's not so easy to practise what you preach.




Those that use correct risk management wouldnt be 50% down in *ANY* holding.



> If Warren Buffet closed out of his postions when down 30% then he wouldn't be where he is today would he.




Undrstand HOW Buffett invests.
He buys enough of the Business to *CONTROL* it.
He then goes about turning it into a power house.
He hasnt been able to duplicate Berkshire Hathaway!

People attempting to emulate Buffett are hopelessly deluded.


----------



## Sean K (14 March 2009)

roamin_oz said:


> All i say is just jump right in. I started with 50G at the beginning of Nov '08 with little to no insight into the stock market other than its down way down on 2yrs ago and it can only go up (shortly) from here.
> 
> I'm currently up $3,500. (3 trades)
> 
> ...



You're on your way to being a great financial advisor Roamin.


----------



## nizar (14 March 2009)

Amateurs.



> Referring to $8.4million in WorldCom stock now only worth about $492,000: "Until you actually sell it, you haven't lost it" - Robert Leggett, Kentucky Retirement Systems.





Professionals.



> Some people say, "I can't sell that stock because I'd be taking a loss." If the stock is below the price you paid for it, selling doesn't give you a loss; you already have it - William O'Neill.


----------



## Trembling Hand (14 March 2009)

Nero64 said:


> If Warren Buffet closed out of his postions when down 30% then he wouldn't be where he is today would he.




Yep, that is wasting 10 years you mean.

Classic!!


----------



## nomore4s (14 March 2009)

roamin_oz said:


> All i say is just jump right in. I started with 50G at the beginning of Nov '08 with little to no insight into the stock market other than its down way down on 2yrs ago and it can only go up (shortly) from here.
> 
> I'm currently up $3,500. (3 trades)
> 
> ...




rotflmao, you've been trading in the market with 50k since Nov 08 and have only closed 3 trades for a $3500 profit - how many open trades do you have? And how far down are they from your entry price?

You will no doubt be saved by this rally that looks like occurring now and think you are a trading genius, lol good luck you'll need it.



Nero64 said:


> If Warren Buffet closed out of his postions when down 30% then he wouldn't be where he is today would he.




lol, I love how people preach Warren Buffet investment strategies when they have no chance of actually being able to invest like him.
- When he started investing the markets were totally different - different era, different cycle & influences.
- When he really started to make serious money was when he could buy large positions in companies and have a say in the future direction of those companies - he wasn't buying $10,000 in CBA and investing it for 30 years to make a billion $, lol.


----------



## roamin_oz (14 March 2009)

kennas said:


> You're on your way to being a great financial advisor Roamin.




Thank you for your sarcasm... i think :



nomore4s said:


> rotflmao, you've been trading in the market with 50k since Nov 08 and have only closed 3 trades for a $3500 profit - how many open trades do you have? And how far down are they from your entry price?
> 
> You will no doubt be saved by this rally that looks like occurring now and think you are a trading genius, lol good luck you'll need it.




Yes i have been trading for 3 months. I usually trade $10,000 or $20,000 worth of stocks each time and sell out between 5-10%. As im not near a computer cause i work full time without access to a computer I put in a price I'm happy to sell out at and just let it go until that day comes and they are sold. 

3 trades were AXA in Nov, AUN in Jan & ANZ in Feb. Currently i have 2 trades open that i have bought recently. MDT ($10,000) and TTS ($20,000). MDT is currently down 0.005 cents and TTS is currently down 18 cents. I'm still in search for then $20,000 i have spare. Tips anyone? 

Saved by this rally, more than likely, hence the reason why i've only just come into share trading. It cant be too far off the bottom. I'm not here to make millions upon millions of dollars though i dream of it. But to me this is just another form of income thats more so a hobby at the moment. 

Like I have said who cares if it takes 4-6+ weeks to make a profitable trade, in the end its not like you worked hard for it. 

In the end though, $3,500 over a 3-4 month period is about 7% which I'm not complaining about. It's better than any bank is going to give me.


----------



## tech/a (14 March 2009)

None are so blind as those who cannot see.


----------



## pilbara (14 March 2009)

roamin_oz said:


> Currently i have 2 trades open that i have bought recently. MDT ($10,000) and TTS ($20,000). MDT is currently down 0.005 cents



Macquarie DDR Trust is a very speculative dangerous investment, a leveraged property trust specializing in USA Shopping malls.  Macquarie's partner DDR is about to be credit rated as junk by Moodys.  This share has fallen more than 95% from its peak.  Since you bought at 4 cents, it fell to a low of 2.7 cents.  Catching a falling knife is dangerous.  As they say, what is the definition of a stock that's fallen 90 percent?? -- a stock that's fallen 80 percent (when you bought it), then halved in value ... requiring a 100 percent gain to get back to where you were.
http://business.smh.com.au/business...es-over-junk-credit-rating-20090313-8xwd.html


----------



## IFocus (14 March 2009)

roamin_oz said:


> Thank you for your sarcasm... i think :
> 
> 
> 
> ...




As a matter of urgency buy Nick Radges Book Adaptive Analysis discussion here 

https://www.aussiestockforums.com/forums/showthread.php?t=2300

and study the bit about money management also Google Risk of Ruin for traders


----------



## nomore4s (14 March 2009)

roamin_oz said:


> Like I have said who cares if it takes 4-6+ weeks to make a profitable trade, in the end its not like you worked hard for it.
> 
> In the end though, $3,500 over a 3-4 month period is about 7% which I'm not complaining about. It's better than any bank is going to give me.




roamin_oz I really think you should follow IFocus advice and read up on risk & money management.

You are playing a dangerous game imo, most of us have been where you are now and have suffered the consequences before improving our risk management.

If my back of the envelope calculations are correct you are currently down about $2,500 on your 2 open trades. MDT is in probably the worse performing sector and TTS lost over 3.5% on the day the XAO had its biggest rally in months - not a good sign. How long are you willing to hold these shares for? What happens if TTS heads back to $2.20? What happens if MDT lingers under 4c for a year?
While I think you will be lucky with these trades due to the market looking like having an extended rally over the next few weeks, you will eventually get burnt - probably the next time the market turns down. And I think you'll be surprised at how fast that $3,500 profit disappears.


----------



## nunthewiser (14 March 2009)

IFocus said:


> As a matter of urgency buy Nick Radges Book Adaptive Analysis discussion here
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=2300
> 
> and study the bit about money management also Google Risk of Ruin for traders




LOL thats the bit i dont understand about ASF .. all so helpful , all so wanting the next bloke to suceed and prosper and not get nailed by mr market .

the reality is tho  we pray for sucka cash usually makes that money flow around and around . gotta have new cash in there to take it and prosper 

kind of a weird situation really but its good that ppl here would rather help there fellow man but in all truth , without the easier cash entering our jobs would be harder 

no offense intended as we all were new to the market  once


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## prawn_86 (14 March 2009)

Interesting point Nun.

I dont think it really matter though, cause despite what most of us are told (MM, stops etc), we dont listen until we get burnt. We tend to think we are better than all the advice out there, and roamin_oz has a 99.99% chance of eventually losing money and then will realise "hey those guys were right".

Its human nature to not learn from others mistakes unfortunately


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## beerwm (14 March 2009)

heh,

as soon as i saw roamin_oz's post, i just knew these posts would start rolling in,

most important thing i think. is when you do get burnt roamin_oz, you realise it was your fault [ not the company, not the stockmarket ],

nothing wrong with making mistakesn unless you dont learn from them.

nun;

whats so wrong with getting people into the market,
its basically a ponzi scheme - so the more people in the market/ staying in the market the better.


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## nunthewiser (14 March 2009)

beerwm said:


> heh,
> 
> as soon as i saw roamin_oz's post, i just knew these posts would start rolling in,
> 
> ...




um , you obviously havent read my post correctly, im all for new cash in the marketplace


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## So_Cynical (14 March 2009)

Hey roamin

U know u could make a lot more money using leverage. :cowboy:


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## Wysiwyg (14 March 2009)

nunthewiser said:


> LOL thats the bit i dont understand about ASF .. all so helpful , all so wanting the next bloke to suceed and prosper and not get nailed by mr market .
> 
> the reality is tho  we pray for sucka cash usually makes that money flow around and around . gotta have new cash in there to take it and prosper
> 
> ...




Yeah I`m surprised such a display of ignorance is met by good advice.I wish I had that advice 4 years ago but as Prawn said "we dont listen until we get burnt".


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## beamstas (14 March 2009)

So_Cynical said:


> Hey roamin
> 
> U know u could make a lot more money using leverage. :cowboy:




I really don't know whether to laugh or cry..

Seriously, don't give crap advice like this out on here. If he belives you and goes and buys shares using leverage and wipes his account how would you feel then? I can't believe someone would suggest to a person with no risk management at all to go and trade using leverage.


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## mazzatelli1000 (14 March 2009)

beamstas said:


> I really don't know whether to laugh or cry..
> 
> Seriously, don't give crap advice like this out on here. If he belives you and goes and buys shares using leverage and wipes his account how would you feel then? I can't believe someone would suggest to a person with no risk management at all to go and trade using leverage.




I thought it was sarcasm


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## nunthewiser (14 March 2009)

beamstas said:


> I really don't know whether to laugh or cry..
> 
> Seriously, don't give crap advice like this out on here. If he belives you and goes and buys shares using leverage and wipes his account how would you feel then? I can't believe someone would suggest to a person with no risk management at all to go and trade using leverage.




i think you missed the tounge in his cheek....... anyways it seems that the poster the post was directed too already an expert and already got it all happening  she,ll be right


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## beamstas (14 March 2009)

Sarcasm is wasted on impressionable newbies with a substancial bank balance to wipe out..

I'd suggest being a bit more careful about giving financial advice.. The joke wouldn't be funny if you were liable for his losses..


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## So_Cynical (14 March 2009)

beamstas said:


> I really don't know whether to laugh or cry..
> 
> Seriously, don't give crap advice like this out on here. If he belives you and goes and buys shares using leverage and wipes his account how would you feel then? I can't believe someone would suggest to a person with no risk management at all to go and trade using leverage.




LOL Joking....mazzatelli1000 got it 

Laughs can be a little hard to come by on a financial forum.


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## nizar (14 March 2009)

So_Cynical said:


> Hey roamin
> 
> U know u could make a lot more money using leverage. :cowboy:




Fukine GOLDEN!  
LOL !!!!!!


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## tech/a (15 March 2009)

So_Cynical said:


> Hey roamin
> 
> U know u could make a lot more money using leverage. :cowboy:




You'd better explain "Leverage".


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## IFocus (16 March 2009)

nunthewiser said:


> LOL thats the bit i dont understand about ASF .. all so helpful , all so wanting the next bloke to suceed and prosper and not get nailed by mr market .
> 
> the reality is tho  we pray for sucka cash usually makes that money flow around and around . gotta have new cash in there to take it and prosper
> 
> ...




Nun you raise a interesting point

Fact is we never know who's on the other side of a trade or why they are. It doesn't matter as long as some one will take the other side then we are in traders heaven i.e. lots of liquidity.

There are a zillion reasons for market participants, people like you and me, funds of many sizes and descriptions, traders hedging for all sorts of reasons options, warrants, futures, shorting etc the list is endless.

New retail traders wash through the market every year its a bit like the tide coming going and  for us it's not a concern if we help another trader find his mojo retail traders that succeed at this are really a very small number(I think).

Most cannot do the time or bear the pain of change in their thinking or behavior to succeed.

Helping another trader wont affect our own results our behavior is what controls that (with some luck)

Best thing I have ever done is to trade markets its expanded my mind to some where few can go and until you stop there is always uncertainty what more could we ask for........Oh money would help


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## pilbara (19 March 2009)

nomore4s said:


> What happens if MDT lingers under 4c for a year?



in the BNB thread Banska Bystrica warned that you often see a final rally in these kind of shares due to the shorts covering (those who went short before the ban).  I guess that's due to insider information where they know an announcement is imminent.


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## saiter (31 May 2009)

Hey guys,

Haven't been trading much as I'm trying to focus on uni but I'm hoping to get into it during the break. I haven't been using/updating the system much as it would just give me a load of tickers to purchase but I wouldn't have enough capital (perhaps my risk is too high...)

Anywho, I've been watching market depth and intraday stock movements for the past 3 months. I entered a trade (PLA @ $1.14) on Thursday after chasing the orders upwards, thinking that it was finally break out of its flag. It did end up breaking out, but I had chased a spike. Not to worry though, the main reason for entry was the breakout and the trade was still valid.
On Friday, PLA seemed to be trending upwards and I had decided to increase my parcel. Everything was going fine until I tried to lock in profits by moving my stop loss (was at $1.08, moved to $1.11) upwards and then I got kicked out by a downward spike to $1.11 at 12:05 PM.
I've got to say, it was ****ing fun  (not losing the money but just "playing the game"). 

This made me rethink my risk management and I created an excel sheet to help me with this. It's meant to be a record sheet, but it also helps you figure out parcel size and what your capital will be at after X number of losses (it should be noted that this value is an OVER estimation and that you'll probably lose less as the maths isn't strictly correct). Hopefully it will help someone.

So the plan for now (for risk management) is to use wider stops with the same amount of risk. This will mean that it'll take longer for me to create a profit but it should prevent me getting kicked out due to spikes. Baby steps.

PS: The file is protected. To edit formulae, go to Review -> unprotect sheet.


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