Dump it Here

[Saqeeb]

Update on my MAP paper trading portfolio.

The index filter on my MAP Strategy has turned on this week and I have 6 signals to enter this Monday 11/05. The paper portfolio is so far in a drawdown of 12%.

The fact that this portfolio was only started in mid February this year has helped it in keeping the draw down to just 12% considering the steep sell off we have had. This is pure luck with the timing.

This week's scan results:
BUYS:
6 buys this week - MLX, PDN, WAF, RMS, MSB and PPH

SELLS:
No sells this week

 

[ducati916]

[B]Intensity of psychological forces
[I][U]Personality [/U][/I][/B]has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the [B][I][U]psychological forces at work [/U][/I][/B]that take on a new intensity when your hard-earned [B][I][U]money is on the line[/U][/I][/B]. Trading is all about human behaviour & perceptions

Skate.

[FONT=Book Antiqua][COLOR=#000000]1. Personality can be divided into:
(a) individual quirks; and
(b) generic traits.

Which will dominate when trading? Can personality be modified? If so how?

2. Are the psychological forces:
(a) operant on individual personality quirks; or
(b) generically?

Which will dominate when trading, individual or generic? Can the psychological forces be modified? If so how?

3. (a) How does money affect these issues? (b) What if anything can be done to manage? Often (many times) traders will trade a demo account. They will often do really well. Then they trade money. They collapse.

This thread (lately) has focused more effort on the actual system, rather than the trader. The focus has been on finding a system (methodology) that trades the market successfully. This would seem to be the common sense approach. Not so much thought has been placed upon the trader and how they could trade. That is to say: making the system fit the traders personality/psychology and as a secondary consideration, fitting it to the market.

jog on[/COLOR][/FONT]
[COLOR=rgb(0, 0, 0)][FONT=Book Antiqua]duc[/FONT][/COLOR]

 

[qldfrog]

Orders entered, wishing good sailing ahead to this new boat:
20x1k positions.taken from my failed daily trial last week
Many familiar codes here...

View attachment 103337
View attachment 103338
View attachment 103341



Sample of [ASX - PNR] placed in the pre-auction (CommSec)
1. The position is only "Good for a Day" & will automatically be cancel if the position is not executed on the day.
2. Commission needs to be no more than "$10" because commission drag will effect the systems performance.

View attachment 103340

Skate.

 

[Newt]

[FONT=Book Antiqua][COLOR=#000000]1. Personality can be divided into:
(a) individual quirks; and
(b) generic traits.

Which will dominate when trading? Can personality be modified? If so how?

2. Are the psychological forces:
(a) operant on individual personality quirks; or
(b) generically?

Which will dominate when trading, individual or generic? Can the psychological forces be modified? If so how?

3. (a) How does money affect these issues? (b) What if anything can be done to manage? Often (many times) traders will trade a demo account. They will often do really well. Then they trade money. They collapse.

This thread (lately) has focused more effort on the actual system, rather than the trader. The focus has been on finding a system (methodology) that trades the market successfully. This would seem to be the common sense approach. Not so much thought has been placed upon the trader and how they could trade. That is to say: making the system fit the traders personality/psychology and as a secondary consideration, fitting it to the market.

jog on[/COLOR][/FONT]
[COLOR=rgb(0, 0, 0)][FONT=Book Antiqua]duc[/FONT][/COLOR]

Definitely a very important "leg of the trading table" Duc. The table will fall over without a decent methodoloy and effectively trader psychology.

There were some very interesting observations by Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.

 

[qldfrog]

Definitely a very important "leg of the trading table" Duc. The table will fall over without a decent methodoloy and effectively trader psychology.

There were some very interesting observations by Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.

It is indeed critical:
I see the beauty in system trading as a better fit to my psychology:
-absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
- conservative or go for it all? you choose your own setting : with or without SL etc
-feeling good/feeling bad?I just apply whatever my system tells me, irrespective of my mood on the day

Am I able to endure the stress when sXXt happens?
Well we got a good example in February and I hung on so not worried about that anymore, call this experience .I would have been better off doing a sell all..but I see that as a failure of the code, now updated to care for that case,-> can we have other dramas, unplanned with code unprepared ?: sure but hey I am aware..
I am a very bad discretionary trader, I look ahead too far and I do not share the average trader view so always bad results, add a pessimistic outlook on life (Call that world life experience) and I am a dreadful punter..

 

[Newt]

It is indeed critical:
I see the beauty in system trading as a better fit to my psychology:
-absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
- conservative or go for it all? you choose your own setting : with or without SL etc
-feeling good/feeling bad?I just apply whatever my system tells me, irrespective of my mood on the day

Am I able to endure the stress when sXXt happens?
Well we got a good example in February and I hung on so not worried about that anymore, call this experience .I would have been better off doing a sell all..but I see that as a failure of the code, now updated to care for that case,-> can we have other dramas, unplanned with code unprepared ?: sure but hey I am aware..
I am a very bad discretionary trader, I look ahead too far and I do not share the average trader view so always bad results, add a pessimistic outlook on life (Call that world life experience) and I am a dreadful punter..

Wise words QF that in Feb you followed your system down rather then over-riding it. Profit from over-riding may feel good in the short term, but not the stuff of the long term trading marathon we signed up for...

 

[Skate]

Definitely a very important "leg of the trading table" Duc. The table will fall over without a decent methodoloy and effectively trader psychology. There were some very interesting observations by Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.

@Newt after listening to the podcast I couldn't help but think others will listen to the same podcast & have a different take. Others might reject the information Jerry passed on because it's contrary to what they want to believe.

Some traders are a wealth of information
I found the podcast interesting from the "get go". I would like to add to your takeaways that might benefit or encourage others to download or listen to other podcasts in the series: https://www.listennotes.com/podcasts/trading-conversations-traderwave-academy-q5ogLDiuPtV/

Information Richard Dennis passed on to Jerry Parker
1. Trading positions too large (that's not right for you) adds to your risk
2. Traders don't follow their system because it's hard to do

Jerry Parker went on to add further
1. Always have multiple entries & exits
2. It's hard to beat the Index because traders don't follow their rules
3. As a trader you need patience
4. You need Risk Control
5. Trend Following is how you make good returns

Your beliefs shape your reality
I have a simple philosophy that "your beliefs shape your reality". People are naturally pleased when processing information that supports their beliefs & have a tendency to embrace that information. It's a real shame that the learning process & system design is a slow & painful process.

Skate.

 

[Skate]

It is indeed critical:
I see the beauty in system trading as a better fit to my psychology:
-absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
- conservative or go for it all? you choose your own setting : with or without SL etc
-feeling good/feeling bad?I just apply whatever my system tells me, irrespective of my mood on the day

Am I able to endure the stress when sXXt happens?
Well we got a good example in February and I hung on so not worried about that anymore, call this experience .I would have been better off doing a sell all..but I see that as a failure of the code, now updated to care for that case,-> can we have other dramas, unplanned with code unprepared ?: sure but hey I am aware..
I am a very bad discretionary trader, I look ahead too far and I do not share the average trader view so always bad results, add a pessimistic outlook on life (Call that world life experience) and I am a dreadful punter..

@qldfrog it's refreshing when traders have confidence in their trading plan, methodology & approach when trading the markets confirming there is no right or wrong way. Without the confidence you will quickly fall into the habit of overriding your system & if you do it once - you'll do it again.

Skate.

 

[Newt]

Thanks for sharing your takeaway key points from the podcast Skate. Totally agree that many might dismiss what is shared as simplistic, but there are some real gems for those that have been in the trenches already for a few years and willing to really listen.

Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you. How often do we hear people want to become "consistently profitable traders", without defining what they actually means. What timeframe, what DD, what psychological pain, etc. I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding.

There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all". Think you've captured that well in your last paragraph - no pain, no gain.

 

[Skate]

Thanks for sharing your takeaway key points from the podcast Skate. Totally agree that many might dismiss what is shared as simplistic, but there are some real gems for those that have been in the trenches already for a few years and willing to really listen. Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you. How often do we hear people want to become "consistently profitable traders", without defining what they actually means. What timeframe, what DD, what psychological pain, etc. I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding. There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all". Think you've captured that well in your last paragraph - no pain, no gain.

@Newt it’s frustrating & time consuming trying to figuring out what trading is all about, it was extremely difficult for me in the early days because I didn't know what I was expected to know. Reading & listening to everyone, absorbing heaps of useless information turned out to be irrelevant in the early stages.

Posting relevant information
I had this grand idea of posting information that I found relevant in my trading journey in the hope of helping others shorten their learning curve. This idea gave rise to the "Dump it here" thread.

Others can learn by following along with the Action Strategy
The hardest part of trading is learning from experience or time in the market, it's learning how to control your emotions, how to keep persisting even when your account suffers a few losses. It’s about being realistic having an understanding that we are probably only average traders at best but that’s okay. The Action Strategy will not be an overnight sensation as every strategy takes time to develop into profits because that's just the nature of the beast.

Traders without an education
These traders are notoriously optimistic & lack patience when they first start out. Everyone is looking for the perfect strategy, a foolproof method, but there isn't any. Trading the Action Strategy in a disciplined manner might be the best we can hope for. I’m first to admit financial markets are complex, but that doesn’t mean it requires a complex strategy. The level of complexity has little to almost no bearing on its performance. Those following along with the Action Strategy will soon realise that every system will have periods of good performance & periods of poor performance yet some tend to worry about the short term ups and downs then remaining focused on the longer term outcome.

Skate.

 

[Rsthree]

The Action Strategy

Well I had one minor glitch with my foray into the Action Strategy. I set up my trading account a few weeks ago, and on Friday I remembered that I only put $14k in the account. So I transferred some more funds on Friday but it looks like they wont come through till Monday.

Frankly I was expecting the portfolio to build over a few weeks, but bang, it all happened on the first scan.

So now I have the first 13 positions on order and I'll just have to buy the remaining 7 at market on Monday. I hope this doesn't upset the experiment too much

My homegrown strategy (paper traded) for the last month has had a bit of a ride. It was sitting at +12% after the first week and then grovelling around at +2% for a couple of weeks and now up to 17%. Volatility!!

 

[Skate]

The Action Strategy

Well I had one minor glitch with my foray into the Action Strategy. I set up my trading account a few weeks ago, and on Friday I remembered that I only put $14k in the account. So I transferred some more funds on Friday but it looks like they wont come through till Monday.

Frankly I was expecting the portfolio to build over a few weeks, but bang, it all happened on the first scan.

So now I have the first 13 positions on order and I'll just have to buy the remaining 7 at market on Monday. I hope this doesn't upset the experiment too much

My homegrown strategy (paper traded) for the last month has had a bit of a ride. It was sitting at +12% after the first week and then grovelling around at +2% for a couple of weeks and now up to 17%. Volatility!!

@Rsthree settlement in normally delayed. CommSec works on T2 which means settlement is in two days. Monday’s purchases are settled on Wednesday. Whereas @qldfrog has posted that his broker requires the funds to be available before purchase.

Hope this helps, I’m hoping you are with CommSec with settlement delay so you don’t miss out.

Skate.

 

[qldfrog]

@Rsthree settlement in normally delayed. CommSec works on T2 which means settlement is in two days. Monday’s purchases are settled on Wednesday. Whereas @qldfrog has posted that his broker requires the funds to be available before purchase.

Hope this helps, I’m hoping you are with CommSec with settlement delay so you don’t miss out.

Skate.

Indeed BD:Bell Direct requires the funds straight away before allowing buy orders, but if you sell some shares, it does credit that amount into the pool of available credit before the D+2 settlement..
Usually... as I have encountered trades where BD wait for actual settlement before allowing you use of the credit: from memory options and I think some government bonds .
The advantage is that you can not order 2 Millions of CBA by mistake if you added 2 extra zero.
I once made a mistake with comsec many year ago where I ended rushing to credit my CDIA and paying some interest .
Every broker will have rules along these lines with variations
Hope it helps

 

[aus_trader]

Indeed BD:Bell Direct requires the funds straight away before allowing buy orders, but if you sell some shares, it does credit that amount into the pool of available credit before the D+2 settlement..
Usually... as I have encountered trades where BD wait for actual settlement before allowing you use of the credit: from memory options and I think some government bonds .
The advantage is that you can not order 2 Millions of CBA by mistake if you added 2 extra zero.
I once made a mistake with comsec many year ago where I ended rushing to credit my CDIA and paying some interest .
Every broker will have rules along these lines with variations
Hope it helps

Yes qldfrog, I don't day trade but do place trades during market hours while doing other things. A bit of Multi-Tasking I suppose !

So it's good to know that I can only trade with funds in my account as well, just like you. So easy to buy a quantity of shares with an extra zero or two !

 

[ducati916]

1. Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you. How often do we hear people want to become "consistently profitable traders", without defining what they actually means. What timeframe, what DD, what psychological pain, etc.

2. I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding.

3. There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all". Think you've captured that well in your last paragraph - no pain, no gain.

1. Many of the answers to [1] are contained in [2].

2. This is the key. When you do not 'depend' on it for income, you can relax and let the system work for you. That is when your gains start to mount. In trading, 'less is more'. Yes, you need to do the work in the early stages, to find a methodology: that methodology however should be easy and basic and not require day-to-day fiddling. Monthly & weekly charts should be your reference points.

Trading should be 1 string to your bow. You should have a number (diversification) of other ventures (profession/job/businesses) that earn you money and investments to spread those earnings into.

I have done the day trading thing at a number of levels (Prop. trading) and it is a mixture of extreme boredom mixed with periods of massive adrenaline and stress (5000 ES-mini contracts). It is not the 'lifestyle' choice that many think it is, or that it is often marketed as.

Every now and then, 2008/9 and currently, there are periods where greater involvement might be required: but they are (usually) infrequent and widely spaced. The rest of the time, there is little (excitement) to be done.

3. Constant personal growth is the key to life, the universe and everything.

jog on
duc

 

[Skate]

While I'm waiting for the markets to open I'll make a few comments about the Action Strategy. First off "I can see" 8 others are following along with the exact same interest that I have in the Action Strategy.

Strategy Development
The Action Strategy is a combination of information @ducati916 has kindly passed on in the "Dump it here" thread. There was enough information to formulate "The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" that are uncannily accurate. I've "actioned" that information to formulate the Action Strategy so it's fitting to explain them a little further.

1. "The Ducati Blue Bar Daily Strategy"
2. "The Ducati Stop & Go Indicator"
3. "The Ducati Acceleration Indicator"

Volatility & volume
The "Action Strategy" is a combination of the above concentrating on "volatility & volume" that also is dependant on turnover, acceleration, momentum to select the best of the best represented in the XAO index. "The Ducati Stop & Go Indicator" tells the strategy when it safe to trade & when to stop taking new signals. "The Ducati Acceleration Indicator" measures "volatility & volume" in relation to the variance of the mean. I explained yesterday why volume is important to the Action Strategy so I'll explain it's partner today "Volatility"

Why is Volatility important to the Action Strategy
High volatility means prices move a lot. Even if you were the best trader in the world, you would never make any profits with zero volatility. In the long term, volatility is good for traders because it gives them opportunities & without volatility there would be no trading. Volatility has a direct correlation with risk & can improve the risk adjusted return of a portfolio. High volatility by itself is not bad, but it can become bad when combined with mismanagement or incorrect interpretation of volume. As with volume, volatility is what enables us to speculate in the market.

Skate.

 

[Rsthree]

View attachment 103337
View attachment 103338
View attachment 103341



Sample of [ASX - PNR] placed in the pre-auction (CommSec)
1. The position is only "Good for a Day" & will automatically be cancel if the position is not executed on the day.
2. Commission needs to be no more than "$10" because commission drag will effect the systems performance.

View attachment 103340

Skate.

Skate, I think I read in your previous post, which I cant find now, that if pre auction order isn't filled at auction then to buy at market. Do you do that straight away or see how it tracks throughout the day?

 

[Skate]

Skate, I think I read in your previous post, which I cant find now, that if pre auction order isn't filled at auction then to buy at market. Do you do that straight away or see how it tracks throughout the day?

@Rsthree if positions aren't executed at the open "the position stays open during the day" & purged after the close.

Important
"Never buy at market" you need to be executed at the "Offer" or not at all.

The Buy Rules
1. The "Buy offer" is good for one day only
2. Never chase the price.
3. There are some positions that you will miss (like "MYR" today)
4. Positions not executed during the day need to be purged after the close (CommSec will do this automatically)
5. Do not "carry over" orders to the next day (positions need to be executed on the same day)
6. The buy rules are not flexible

The Sell Rules
1. Never sell before a signal is given
2. Sell in the pre-auction at the "Offer"
3. If the position is not sold in the pre-auction (at the open) wait till 10:30 am for the market to settle
4. If the position is still open after 10:31 am - sell immediately "at market" (@Rsthree this is what you are remembering)
5. The sell rules are not flexible

Skate.

 

[Rsthree]

@Rsthree if positions aren't executed at the open "the position stays open during the day" & purged after the close.

Important
"Never buy at market" you need to be executed at the "Offer" or not at all.

The Buy Rules
1. The "Buy offer" is good for one day only
2. Never chase the price.
3. There are some positions that you will miss (like "MYR" today)
4. Positions not executed during the day need to be purged after the close (CommSec will do this automatically)
5. Do not "carry over" orders to the next day (positions need to be executed on the same day)
6. The buy rules are not flexible

The Sell Rules
1. Never sell before a signal is given
2. Sell in the pre-auction at the "Offer"
3. If the position is not sold in the pre-auction (at the open) wait till 10:30 am for the market to settle
4. If the position is still open after 10:31 am - sell immediately "at market" (@Rsthree this is what you are remembering)
5. The sell rules are not flexible

Skate.

Thanks yes, that what I was remenbering.

Thank you very much for the hand holding process, its much appreciated. Everything sinks in with a little experience.

 

[Skate]

Confirmations that the Action Strategy is in full swing & [MYR] has been purged.






























# Next portfolio update
Friday 15th May 2020

Skate.