Dump it Here

[jbocker]

@jbocker - "A lacky-band gun removed from an algebra class because it was a weapon of math disruption"

After many years I have finally changed my tag @Skate. You can read it below in my sign off. I changed it to this as I feel a greater realisation of it, the older I get.

 

[Skate]

The article below has been written by: NextLevelForex (AmiBroker forum member)
I've been given kind permission to post an article written by "NextLevelForex" a member of the "AmiBroker forum" The article below has been succinctly written by an experience trader in the hope of helping others. IMHO the short article covers it all & is very worthy of a few reads.

I've made 1,410 posts
I've made quite a few posts to say what "NextLevelForex" said in one short article - nailing it..

Bullet points taken from the article
# the "next thing" would solve whatever issues I encountered
# I never really had a system, but it’s only much later that I learned that
# maybe I would have started it with more preparation and discipline
# I changed many things about myself for the better
# I also seem to (finally) have a system that I trust to trade for the long run.
# the best system is one that you can stick with (and it is assumed that it does have an edge)
# making nice returns when you have a winning year, that's the meaning I give to "consistently profitable".

Now for a powerful closing statement
In closing, if someone wants to trade only because of the promises of easy money, I would advise that person to find another reason, or, better yet, reasons. I love numbers and programming more than I love making money. If it was only for the money, I would have quit this journey a long time ago..."

Appreciation
My thanks go to "NextLevelForex", his article hit a nerve with me..

The original article can be found here: https://forum.amibroker.com/t/what-is-the-most-profitable-trading-strategy/16227/25

-------------------------------------------

Hi everyone,

"I started trading in 2002, and till 2013 I switched from one thing to another (from funds to stocks, then to options, next to futures, then to forex, and finally real estate). Probably the biggest mistake was not recognizing what I was doing wrong, for each market and “system”, and instead thinking that the "next thing" would solve whatever issues I encountered. I put system in quotes because I never really had a system, but it’s only much later that I learned that

In hindsight, I am very happy I persisted, and I'm also glad I did not know how long and hard the journey is. Had I known that, I might have not even started it (or, who knows, maybe I would have started it with more preparation and discipline).

Why am I very happy I persisted? Because, in the end (after about 5 years), not only I changed many things about myself for the better (like being more accepting of the unknowns of life, thanks to lessons learned from a trading perspective), but I also seem to (finally) have a system that I trust to trade for the long run.

As a few people pointed out, the best system is one that you can stick with (and it is assumed that it does have an edge). Looking back, many of the things I tried in my pre-2013 era did have an edge, but I did not stick with those systems through the drawdowns... Plus, as mentioned above, I did not really have all the pieces in place, so they were incomplete systems, which made matters worse.

Am I consistently profitable? That totally depends on so many things, it's genuinely difficult to answer. For example, what is consistent? Not having a losing day, or week or month? If that's the meaning you give it, than I'm not in that bucket, and I may very well never be. Does it mean not having a losing year? Again, not my definition and does not apply to me. Losing small when you have a yearly loss, and making nice returns when you have a winning year, that's the meaning I give to "consistently profitable". (and here, "small loss" and "nice returns" are again what you say they are, not some universally accepted values)

Also, what is the size (depth) and duration (length) of the drawdowns you are willing to go through? A good exercise, in my opinion, is to download SP500 daily data from Yahoo, or any other broad index that you like, and calculate some of its metrics, using Excel. I guess a lot of people are happy with the returns SP500 delivered after March 2009, but they seem to be of the opinion that the index cannot go through another deep drawdown like it did in 2008. But, if it does, would you be ok with that drawdown, for the annual performance it delivered?

In closing, if someone wants to trade only because of the promises of easy money, I would advise that person to find another reason, or, better yet, reasons. I love numbers and programming more than I love making money. If it was only for the money, I would have quit this journey a long time ago..."

Hope this helps!

-------------------------------------------

Conclusion
In this game - help from other is the key to success

Skate.

 

[qldfrog]

Conclusion
In this game - help from other is the key to success

That is it, and the moral obligation to do the same once you can help in however little way you can.
Good stuff as always.i bookmark

 

[frugal.rock]

So why is market acting the way it is?

That’s anybody’s guess.

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

Did @peter2 do a summary as mentioned above?
Would be interested in it also.
F.Rock

 

[frugal.rock]

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

My answer got a reflective nod in return.

Skate.

And what was the piece of advice?

F.Rock

 

[frugal.rock]

Targeted teaching

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


Skate.

Can you please elaborate on particular trig functions used? (what, when, how they are applied... too big an ask?)
Was also wondering what you taught at TAFE to adults...?
F.Rock

 

[frugal.rock]

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

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

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

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

Skate.

Thoroughly agree.
Any further news on @tech/a sons software?
Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
What have I done...!
F.Rock

 

[qldfrog]

Thoroughly agree.
Any further news on @tech/a sons software?
Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
What have I done...!
F.Rock

FRock, if i may ask how old are you: not derails but 20s,30s,40s, etc
Are you working for fun or money?
I would be very careful before even thinking of trading as a career choice unless employed by someone
Self trading can bring money but you will need to build experience and deep pockets..anyway
A few years of stable income and a fall back position may be the way to go
My 2c

 

[frugal.rock]

Hi qldfrog,
I am as old as the dew on the grass, and as old as the hills themselves.
Many moons have I seen, waxed and waned, blood red, orange and blue.
The sun has risen and patinad my face and taught me to seek shelter from it's hue.
The answer you seek is determined by you.
F.Rock
PS; thank you for your concern, much appreciated. I have digested much from the participants on this forum, yourself included, but you need not worry about me, merci beaucoup.

 

[Skate]

And what was the piece of advice?

F.Rock

"Don't waste the dash"
Before you ask, let me explain what the Dash is. On a Headstone the "DASH" represents a life that was lived.

"Don't waste your life"
Don't waste the dash is my cryptic way of say, "don't waste your life" The dash between 1949 - 1996 represents the time Timothy's was alive.



You are the only one
@frugal.rock you are the only one who asked "what was my advice that got a nod" - Well done..

"It's better to remain silent & be thought a fool than open your mouth & remove all doubts"
People in general don't want to say "I don't know" what that means because it may make them sound like an idiot "not knowing". All I got from the guy was a "NOD" - he was clueless to the advice I had just given him, more importantly - he didn't care.

Clouds
I find some people are like clouds. When they go away, it's a brighter day.

Skate.

 

[Warr87]

FRock, if i may ask how old are you: not derails but 20s,30s,40s, etc
Are you working for fun or money?
I would be very careful before even thinking of trading as a career choice unless employed by someone
Self trading can bring money but you will need to build experience and deep pockets..anyway
A few years of stable income and a fall back position may be the way to go
My 2c

@frugal.rock
I find system development and testing fun, and its great each time I learn something to improve my system. Like skate, I'm not doing this for the money but find it as something enjoyable.

There are a lot of cautionary tales of people going to trading full time and then going back to work, blowing up accounts, etc. If you are trading full time, then your profits are paying for your living expenses. When you hit a drawdown, you are going to be taking money out of your capital to pay your bills making it harder to recover. Some well known traders (I think Nick Radge was one) who said it was a mistake to go full time trading when they did and they probably should have waited a bit longer. They certainly weren't the only ones. You would need enough capital to pay your bills for 2 years without touching your trading account. Not feasible for most.

I would recommend you finish uni. I'm biased though as I actually enjoy uni (and heading back to uni again this year. I start in 2weeks). Get that piece of paper. A lot of companies who like people with degrees also don't usually care about what the degree is, they want to see commitment to see something through for a few years. If you can't commit for a few years, then why would they think you will stay at their company?

I'm content with trading at the end of the week, allowing me to do work and uni and adding to my trading account as I earn a steady income. Nothing wrong with trading on the weekend.

 

[Skate]

Did @peter2 do a summary as mentioned above?
Would be interested in it also.
F.Rock

@frugal.rock - it was a rhetorical question

So why do markets act the way do?
That’s anybody’s guess. Trading is not an exact science. The markets are emotional that’s a given because humans are the emotional drivers of the markets & these emotions never seem to change. I hate when rational people go out of their way to constantly make irrational decision, I find it a battle just to keep up with them.

Skate.

 

[Skate]

Can you please elaborate on particular trig functions used? (what, when, how they are applied... too big an ask?)
Was also wondering what you taught at TAFE to adults...?
F.Rock

@frugal.rock trading using a mechanical system is ideas turned into code & coding is full of mathematical equations - There is a lot of chatter at the moment about Machine Learning & how ML can be incorporated into AmiBroker. If you you like to know more about the subject or the math's behind it read here: https://www.linkedin.com/pulse/how-...time-series-forecasting-vegard-flovik-phd-1f/ or here: https://en.wikipedia.org/wiki/Long_short-term_memory for a better understanding.

TAFE
I was approached to teach a two year refresher course in Mechanical Engineering conducted at a TAFE institution. It was boring as Bat$hit.

Skate.

 

[Skate]

Thoroughly agree.
Any further news on @tech/a sons software?
Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
What have I done...!
F.Rock

@tech/a ML software is still in the development stage AFAIK

Qualification
Employers love degrees & qualifications - my office wall was once covered in them (they now reside in a plastic bag) @Warr87 has already given you good advice on Uni so I'll leave it at that.

Being a full time trader
With bucket-loads of money behind you, full time trading is an option otherwise stick to your day job. As they say with trading "how do you end up with a Million Dollars at the end of the year?" = Start with two (million) @qldfrog has also given you good advice.

Skate.

 

[Skate]

@Saqeeb sorry for the delay. Let me outline the analysis & reasoning behind the purchase of SRG today, remembering "One swallow doesn't make a summer" - meaning the outcome of this or any "one trade" is not guaranteed because of the uncertainties the markets hold.

The CAM strategy
The CAM strategy has indicated that SRG has started in a “Counter Trend” rally & is a buy today.

A Counter Trend?
The CAM strategy uses two indicator the (1) MACD & (2) ADX to determine a "Counter Trend" rally by comparing the slope of those indicators. The slope of each indicator identifies four different trends which is nothing short of amazing. Also using the commodity channel index (CCI) as a guide helps filter out many of those false signals that are sometimes impossible to avoid.

@tech/a often says - “when all the Ducks align”...

Counter trends
The CAM strategy has determined (ASX:SRG) is in the start of a "Counter Trend Rally" indicated by the BLUE-coloured price bars. The CAM Strategy colours the price bars so you know exactly the condition of every bar - meaning a "blue price bar" indicates a counter trend has commenced. A counter Trend is when the 10-period (ADX) is declining but the (MACD) is rising whilst having a closing price above the 13-period EMA.

ROC Filter
Also another indicator confirms that the ROC Filter is above 0% (the yellow ribbon at the bottom of the chart) - No yellow ribbon below the price bar means it’s safe to enter the position.

View attachment 99228

A bit about the ADX indicator
The "Average Directional Index" (ADX) shows the "strength" but "not the direction of the price that is trending". Trading in the direction of a strong trend reduces risk and increases profit potential. The ADX rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates.

Explanation of the MACD indicator
The "Moving Average Convergence Divergence" (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement & can be useful to determine if a trend is strong or weak.

I only use a few Indicators
ATR, CCI, ROC, EMA, MACD, DSMA, ADX, MA
With an infinite number of indicator combinations, how on earth are you supposed to find something that works.

Using them in combination
Indicators by themselves have limited use but using indicators in combination makes them perform much better.

Indicators are just - Indicators
The key takeaway here is that indicator-based strategies will always be condition-dependent & I have designed them to work in a trending market. Indicators by themselves don’t make a strategy they just make a good strategy even better IMHO.

I have two complete strategies at the moment under going paper trading.
(1) a MAP strategy (a Moving Average Strategy) that has already been discussed in the 'Dump it here thread & coming along just nicely.
(2) Also I have a DSMA strategy (DSMA is an indicator developed by John Ehlers) - The DSMA indicator is an adaptive moving average that features rapid adaptation to volatility in price movement. As usual I'm not using the indicator as designed but I have wrapped John Ehlers idea into a whole new trading strategy & if paper trading aligns with backtesting I'll be doing cartwheels.

Skate.

Skate's hanging his head in shame
Nah, not really (my paragraph headers are a form of click-baiting) to encourage you to read the next paragraph then the next & so on.

Update on the purchase of SRG
SRG was a losing trade - The CAM strategy indicated that SRG had started in a “Counter Trend” rally & was worthy of a punt. My CAM strategy has a 50/50 success rate, the winners I tend to keep & the 'DUDS' don't worry about them, I'll trash them quickly (so I can get into another position quickly)

Let's talk about PositionScore
PositionScore is a ranking feature of Amibroker, meaning if you have more signals than funds, which signal do you take first or till your funds are fully invested? We do it by ranking the entry signals to decide which entries are preferred over the others (what method you rank the signals is up to you). Why mention this? If you look at my Buy signals for the 20th December 2019 (that includes SRG) you will notice SRG is well down the list & the positions above have to be taken to get to buy SRG. FYI - all the securities above SRG in the list have been taken first before SRG can be purchased.





Lets evaluate the positions (Score card) how they went or how they are currently going
I'll give you today's score card how they have traveled/travelling since being taken. Some positions have been cashed out (losers), some are struggling (hanging in there) & some are winning at the moment. (go you good things -- GO!)

The Score Card..
NVL – WINNING - Still in the trade & currently a WINNER (at the moment)

QMS – WINNING - Still in the trade & currently a WINNER (at the moment)

[VRL] – ## SELL SIGNAL PENDING (currently still in the trade) ##

REH – WINNING - Still in the trade & currently a WINNER (at the moment)

APA – is STRUGGLING at the moment

SLR – WINNING - Still in the trade & currently a WINNER (at the moment)

SXE - - - EXITED at a LOSS

SSM - - - EXITED at a LOSS

NUF – WINNING - Still in the trade & currently a WINNER (at the moment)

CHC – WINNING - Still in the trade & currently a WINNER (at the moment)

NST – WINNING - Still in the trade & currently a WINNER (at the moment)

MPL – is STRUGGLING at the moment

CUV – is STRUGGLING at the moment

[VTG] – ## SELL SIGNAL PENDING (currently still in the trade) ##

SRG - - - EXITED at a LOSS (Boo-hiss, the security in question)

HT1 – is STRUGGLING at the moment

WPP – WINNING - Still in the trade & currently a WINNER (at the moment)

BGA – WINNING - Still in the trade & currently a WINNER (at the moment)

NEA - - EXITED at a LOSS with a new “Buy” SIGNAL PENDING

GTN – WINNING - Still in the trade & currently a WINNER (at the moment)


The Chart of SRG - the loser!



Any Interest
I won't clog up the thread with a heap of charts but if there is any interest in any of the positions taken - just ask & I'll post them up (positions closed or still open)

Charts have educational value
Viewing a few charts might be handy to understand why positions were taken (who knows, it may have no value at all), understanding why a positions was taken gives a direct insight to the working of a strategy. Sometimes its nice to see how the previous positions turned out (was that signal a winner or a loser, a visual strike rate)

Mechanical Trading
Trading in a disciplined manner by following my trading rules executing the signal without override any - I've found my “Holy Grail”.

Skate.

 

[qldfrog]

Trading in a disciplined manner by following my trading rules executing the signal without override any - I've found my “Holy Grail”.

So do i but what if the buy is triggered on a takeover announcement..this is the only time so far where i deviated
I took some but the cash is pretty static, a term deposit with negative or positive risk if counteroffer are made etc...
Not really a trading issue as such, yet influence is great

 

[Skate]

So do i but what if the buy is triggered on a takeover announcement..this is the only time so far where i deviated
I took some but the cash is pretty static, a term deposit with negative or positive risk if counteroffer are made etc...
Not really a trading issue as such, yet influence is great

@qldfrog said: "if the buy is triggered on a takeover announcement..this is the only time so far where i deviated"

No No !!
Your final decision forms your trading plan - that's your plan, you are still following your plan 100% - Amibroker is your strategy & unable to understand when ASX makes announcements let alone understand there implications - Amibroker handles your strategy - you handle your trading plan, it's up to you to execute your plan, there is a distinction.

Skate.

 

[Skate]

Let's talk about irritations
(a) Have you ever executed a sell only to see the position reverse & take off again. Well it doesn't bother or irritate me. I see it as a potential re-entry, just because the previous position didn't go our way - the next move may be a winner, we might have been too early (that's all). (b) Have you ever caught yourself checking a position that's you have already sold to see if you made a good decision. (don't do that because it can lead to irritations & frustrations) Let sleeping dogs lie, concentrate on executing the next position.

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

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

EXAMPLE of SRG taking off again (SRG is setting up for the next move)



Skate.

 

[Country Lad]

(a) Have you ever executed a sell only to see the position reverse & take off again.

Lost count over the years, let's just say - often.

(b) Have you ever caught yourself checking a position that's you have already sold to see if you made a good decision.

Not for that reason, but I do follow them on the basis I bought in initially for a good reason. If that good reason is still there, then I look to buy back in at an appropriate time.

 

[Skate]

The advantage of an edge

What's my edge?
I have a fast exit. (StaleStop) If any position is not performing I'm out of the trade & into another. I keep the winners & the (StaleStop) helps me quickly cull the under-performers. Don't get me wrong - winning trades can equally be under achievers & selling them quickly rather than holding on to them is how my mathematical advantage works. I'm selling winners all the time & not to take profits but just because their momentum has tailed off or slowed.

Get out quick
Timing of the exit is critical to any strategy. Cutting trades early is the secret of being a profitable trader. Alternative I could watch the positions & wonder what I should do next, (a favourite pastime with some traders) but really how much latitude should they be given? (Heck None, as far as I'm concerned). Getting the exit timed correctly works better for me.

The importance of an exit
Nailing the "EXIT" really determine the final outcome of the trade & don't let anyone convince you otherwise. I'll post a capture from my CommSec account to display the difference between the % of winners compared to the % of losers (they are my top two winners & my top two losers - at the moment) This is an example of my edge (I keep the winners & cull the under-performers - it works for me)

A timely reminder
When I post it's from my live trading - I'm one member that post real trades. Its rare on this forum to see members posting true trading results & snippets of trading figures - all done in the hope that traders find an educational value.

Lets post up some captures (WINNERS)
These are my best two performers at the moment










Lets post up some more captures (LOSERS)
These are my worst two performers at the moment










Take Notice
Look at the difference in holding period between winners & the losers

Disclaimer
The CAM Strategy just cashed out ADH as a "WINNER" - it's the very reason we need a variety of strategies in our tool box. Having an alternative strategy (a different tool) & how to use the tools in combination means you can get the best of both worlds. Having a variety of tools is a sure fire way of giving yourself a fighting chance of becoming a more effective trader & lessen your overall risk.



Summary
IMHO - Strategy combinations is a way of "Having your cake & eating it too"

Skate.