Dump it Here

[Skate]

So here we have the systems traders v the discretionary chaps: this pretty much mirrors the ASF community atm.

View attachment 101944

And we have 'insiders' buying their own stocks heavily:

View attachment 101945

I monitor the various systematic based strategies here on ASF, particularly Mr Skate's thread and systems, (although there were some discretionary purchases in there) which are currently not active. When the systems switch to buying (US based algos) there will be a further bull bounce. When the retail systems kick back in, we may well get an additional bounce or continuation of that initial leg higher.

The discretionary traders, relying on experience, gut feel, subjectivity, etc are actively in the equity market. Time will tell whether we are early and will get caught in a further downdraft, or, have secured some real bargains moving forward, hence the chart disclosing the insider purchases, as you would think that they have much harder data re. their companies currently.

Absent any deterioration in COVID-19, we will have the economic consequences to deal with. However these I doubt will create a lower low. The downturn in the economy (bankruptcies, higher unemployment, etc) will be mitigated to an extent through that reduced supply and resurgent demand as economic activity picks itself back up off of the floor.

The key will be whether the medical sector can get a grip on effective treatment and future prevention of COVID-19 to prevent a second wave of infections.

jog on
duc

@ducati916 expanding on your post (systems traders v the discretionary chaps) would be perfect for the "Dump it here" thread. The reason I'm a mechanical system trader is twofold (1) I lack the required skills & (2) I wouldn't trust myself to make the correct decision on a constant basis.

Weekly verses a Daily system
There is merits in both time frames but for "me" I prefer a weekly system, it also reduces the workload & to me it's like boxing in slow motion. There is always a discussion when "Discretionary trading verses Technical trading" is raised - I'm a believer if it works for you it's right for you & the merits of both can be posted & discussed.

Exits are important
Duc, you now have to admit after watching the extreme volatility these past few weeks the exit carries more weight than timing the entry. There is always a robust discussion when I raise the question around the "entry verses the exit" & which is considered more important when it comes to the profitability of any trading plan. I still hold the position that "exits" is where the money is made, when others disagree the "Dump it here" thread gives a perfect platform for others to express an alternative.

The last 3 weeks
I killed so many brain cells testing alternative exits in the desire to find a cleaner & quicker exit than the ones I already have. The results so far have been unspectacular to say the least as I'm unable find anything that works better than my "GTFO" indicator. I'm open to suggestions.

Skate.

 

[ducati916]

1. @ducati916 expanding on your post (systems traders v the discretionary chaps) would be perfect for the "Dump it here" thread. The reason I'm a mechanical system trader is twofold (1) I lack the required skills & (2) I wouldn't trust myself to make the correct decision on a constant basis.



Exits are important
2. Duc, you now have to admit after watching the extreme volatility these past few weeks the exit carries more weight than timing the entry. There is always a robust discussion when I raise the question around the "entry verses the exit" & which is considered more important when it comes to the profitability of any trading plan. I still hold the position that "exits" is where the money is made, when others disagree the "Dump it here" thread gives a perfect platform for others to express an alternative.

The last 3 weeks
3. I killed so many brain cells testing alternative exits in the desire to find a cleaner & quicker exit than the ones I already have. The results so far have been unspectacular to say the least as I'm unable find anything that works better than my "GTFO" indicator. I'm open to suggestions.

Skate.

1. Because I trade the US, I am aware of the 'algos', which I cannot clearly define, but are present nonetheless. They are often visible during low volume periods intra-day, when, the trend will suddenly reverse for no apparent reason. It is not enough to break the 'trend' of the stock as it is short term and reverses itself, whereupon the 'trend' for the day is restored. I have never bothered pursuing this, but it 'seems' the reverse is tied to a volatility measure (which for a few years has been low) in some way within the programme.

The algos programmers will have used multiple variables as inputs, in as much the same way as systems traders have done. I have no particular knowledge as to what the majority of these inputs are. However one variable that I believe they use is 'volatility'. Whether this is taken from the VIX or other sources of volatility, who knows, but I use the VIX as a proxy for the algo traders.

So when an exogenous event ramps up volatility, in this case COVID-19, the algos build on that volatility expanding it: they stay in a trade longer (their programmes seem to adapt to it) expanding the ranges...which, affects other market participants, which can extend the ranges further still, and you get a self-reinforcing feed forward loop, which happens to mirror a number of biological systems.

Recently, volatility as measured by the VIX has been dropping. Ranges in the indices have been contracting, as are the ranges in stocks. They are still obviously higher than previously, but down on the really volatile patch that we had. This was part of the bottoming process in 2009, 2018, 2019.

A further observation (take it with a pinch of salt) is that the 'long' side (Value Funds, etc) will not buy long into high volatility. They will wait for a lower volatility environment before committing to new buying. Their buying, also starts to create a bottom in the market. This buying also has that same feed-forward loop and volatility drops further, restricting the algos in pushing volatility higher through range expansion. So volatility and cash/volume are two inputs to the algos. At this point, fundamental market valuations will have an impact. Value funds will live through further 'small' declines on new purchases. Thus a further volatility expansion is muted through stability in this buying. Often (as long as volatility does not ramp up) they (Value) will add to positions on further declines.

You also have the market makers who will hedge their positions, they also serve to dampen volatility. For example in the Options markets, sellers of Puts will hedge with long stock/futures gamma scalping (which is highly profitable as long as your execution costs are low) to offset the high volatility.

At some point, the general market will move higher from the (true) bottom. This is where systems traders systems will start to activate and if we have had a market decline, buying long.

Which is why I watch the various systems here on ASF (as the ASX follows the US) for the start of buying long positions. Not so much for my taking a position as I trade volatility, but more for the establishment of a general market bottom.

2. Not necessarily. If you had bought the 'bottom' in 2009 and had held long, you would still be holding a profit and possibly thinking about adding to the position.

If of course some of your purchases were recent, then an exit to protect against a loss is critical. Given that your systems are cycling you in and out of stocks, from your perspective, I agree the entry is almost irrelevant as you buy high to sell higher. In this scenario, the exit is all encompassing. Your GTFO trigger seemed to work as well as anything and better than most.

3. You will (obviously) have to programme into your systems some form of indicator. Two that you could use are (a) VIX and (b) Put/Call ratio (if you do not already use them).

jog on
duc

 

[Skate]

You will (obviously) have to programme into your systems some form of indicator. Two that you could use are (a) VIX and (b) Put/Call ratio (if you do not already use them).

Living & trading in a bubble
@ducati916 has given me a few ideas that I wish to share. As usual "for me" it's all about jumping on trends & now with a few new ideas from the "Duc" I'm using those indicators to guide when its optimal to buy & sell. I have a simple trading method of riding trends.

Explanation
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next daily blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar". It's a simple strategy I have to admit.

This only leaves three, BTH, NXT, TNE. (It rhymes)
BTH: Not a clear higher swing low. Still in trending down. Discard
NXT: Currently too volatile buy at 8.00 with a SL at 6.5 is too much. Discard
TNE: Interesting, but also too volatile at the moment. Put in the watch list.
A glimpse of how I review the scan results each afternoon before the close. A one day rally doesn't change the down trend. It's going to take much longer. The current high volatility makes the initial risk sizes much too big. It's worth waiting for the volatility to decrease.

Charts
As I'm using Pete's blue bars, I'll chart up the 3 securities from Pete's post above being: BTH, NXT & TNE so you can see the charts aren't cherry picked.













Well done
@peter2 picks are on the money (as usual)

Had my first trade today I didn't understand everything 100% but I bought 2000 shares in PNV Polynovo. Anyways glad to have my first trade under my belt still got heaps to learn.

Let's examine another post
@bfhoon had his first trade & he purchased "PNV" Polynovo - so let's examine what "The Ducati Daily Blue Bar strategy" thinks of this purchase of "PNV"



Well done
"The Ducati Daily Blue Bar strategy" gave a signal on the 24th March, the buy on the 25th March so well done @bfhoon at this stage we would hold that position till we get our first red bar, than sell on the next open.

Chatter in a few threads
There has been some recent chatter in the relevant threads of PPH, NAN & SLC - so let's examine them by applying "The Ducati Daily Blue Bar strategy"

PPH
@Trav. @galumay & @Dona Ferentes - might find interest in this chart as they have made comments recently in the "PPH" thread.







NAN
@Dona Ferentes @Country Lad @finicky & @sptrawler may find interest in this chart from their recent comments in the "NAN" thread.







SLC
@Dona Ferentes @Iggy_Pop @galumay & @peter2 may find interest in this chart from their recent comments in the "SLC" thread.




Summary
The ideas I've gained from @ducati916 recent post has been educational helping me to code "The Ducati Daily Blue Bar strategy" that on face value has merit for a simple strategy - it's not too shabby at all.

Skate.

 

[Skate]

Let me make a few more comments
Eyeballing a few charts with "The Ducati Daily Blue Bar strategy" applied I'm amazed how simply it plots a trend. Buying the first "blue bar" & selling the first "red bar" is simple & effective. I'm first to admit the strategy needs further development (my "To-do-List" is forever growing)

New strategies
With each new "Trading Strategy" or "Trading Idea" it's not about making easy money but rather tilting the odds of success in our favour by buying into trends whilst minimizing our losses. Trading is all about buying good companies at the "right time" & getting off quickly when the position turns south. It's also worth noting "some" traders forget to have a mechanism in place to take profits.

Who knows what the future holds
After reading @bigdog thread today it paints a grim picture for trading on Monday. Let’s assume @bigdog post is correct, some traders could be fearful of another huge sell off & their plan might be to sell now & buy back later, who knows. One man's trash is another man's treasure.

What should we do?
Too much advice in my opinion is flawed as the advice focuses on what to "buy & sell" & it never focuses on "when to buy". "The Ducati Daily Blue Bar strategy" can alleviate this concern as the ‘timing’ is governed by the "blue bar" driven by the most recent trading results. There are still bargains to be had & odds of picking these are favourable (IMHO) using "The Ducati Daily Blue Bar strategy".

It looks ok
“The Ducati Daily Blue Bar Strategy” is successful entering the trend early & "staying in the trend" as long as possible is the key to its profitability. When the position goes against the trend we simply hop off on the next "red bar", it couldn't be simpler.

These are difficult times
We all have to do better to understand technical analysis a little better so we can improve our trading skills. Having an open mind to new trading ideas "could be the key". We all know things will change, "for better or worse" & if we are trading at the moment, it can get us into a pickle - or - on the flip side, it can make us a lot of money. Opportunities don’t come around all that often & having the correct trading plan can "save" or "make" us a lot of money. Individual traders need to decide their course of action because we all need to sleep at night. Your trading plan & trading strategy are different so let’s not confuse the two.

Skate.

 

[ducati916]

Mr Skate,

I hope you will update the various charts already posted. I am interested how my eponymous strategy works out. Hopefully it is wildly successful and not a dog's dinner.

jog on
duc

 

[Skate]

Mr Skate, I hope you will update the various charts already posted. I am interested how my eponymous strategy works out. Hopefully it is wildly successful and not a dog's dinner.

@ducati916 as you have asked I've taken the liberty to track the positions listed in the charts above being: BTH, NXT, TNE, PNV, PPH, NAN, & SLC. The securities haven't been cherry picked - I have used a few securities that @peter2 has recently posted in his thread, also @bfhoon reported his first buy so I grabbed that as well. The rest of the securities were picked from recent chatter in their respective thread, so overall it was mix of securities.

Duc, let's see how your eponymous strategy works out
I have the Portfolio up & running with up-to-date trading results for the 7 charts listed above. The Buys were taken as per your strategy.

The Ducati Daily Strategy
Start Date: 18th March 2020
Portfolio Capital: $105,000
Positions in the Portfolio: 7
Fixed Position Sizing: $15,000
No re-balancing or additional purchases


The buys in order
TNE @ $7.00 for 2142 shares on the 18th March 2020
PPH @ $2.99 for 5016 shares on the 23rd March 2020
BTH @ $0.47 for 31914 shares on the 25th March 2020
NXT @ $7.94 for 1889 shares on the 25th March 2020
PNV @ $1.53 for 9803 shares on the 25th March 2020
NAN @ $5.45 for 2752 shares on the 27th March 2020
SLC @ $0.54 for 27777 shares on the 27th March 2020























Tracking
I'll report when positions are sold & a summary at the end when the last position is sold. With the current turbulent trading at the moment every strategy will be under pressure to perform so the next few weeks will be a good test to see if "The Ducati Daily Strategy" from Duc ideas are "wildly successful or a dog's dinner" - his words not mine.

So far so good
Two thumbs up at this stage..





Skate.

 

[frugal.rock]

Mr Skate esquire,
I would be interested to see the ducs blue bars indicator on NCZ ?
Wondering what I am seeing that others aren't?

F.Rock

 

[Skate]

Mr Skate esquire, I would be interested to see the ducs blue bars indicator on NCZ ?
Wondering what I am seeing that others aren't? F.Rock

@frugal.rock thank you for your enquiry about NCZ. "The Ducati Daily Blue Bar strategy" chart is easy to understand as the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar.

In a nutshell
We buy on the 2nd "Blue" bar & sell on the 2nd "Red Bar"

The Ducati Daily Strategy
Start Date: 27th March 2020
Portfolio Capital: $15,000
Positions in the Portfolio: 1 (NCZ)
Fixed Position Sizing: $15,000

"The Ducati Daily Blue Bar strategy"
NCZ would have been purchased on 27th March @ $0.076 (197,368 shares = $15k my minimum purchase amount)






Portfolio Dashboard Results
The Dashboard is easy to read as each cell is colour coded with the corresponding results









A picture paints a thousand words
I hope the chart & the Dashboard alleviates wondering about what others are seeing.

Summary
"The Ducati Daily Blue Bar strategy" hasn't let us down yet as the "Blue" bars signaled that NCZ is on the move.

Skate.

 

[ducati916]

@ducati916 as you have asked I've taken the liberty to track the positions listed in the charts above being: BTH, NXT, TNE, PNV, PPH, NAN, & SLC. The securities haven't been cherry picked - I have used a few securities that @peter2 has recently posted in his thread, also @bfhoon reported his first buy so I grabbed that as well. The rest of the securities were picked from recent chatter in their respective thread, so overall it was mix of securities.

Duc, let's see how your eponymous strategy works out
I have the Portfolio up & running with up-to-date trading results for the 7 charts listed above. The Buys were taken as per your strategy.

The Ducati Daily Strategy
Start Date: 18th March 2020
Portfolio Capital: $105,000
Positions in the Portfolio: 7
Fixed Position Sizing: $15,000
No re-balancing or additional purchases

View attachment 102016
The buys in order
TNE @ $7.00 for 2142 shares on the 18th March 2020
PPH @ $2.99 for 5016 shares on the 23rd March 2020
BTH @ $0.47 for 31914 shares on the 25th March 2020
NXT @ $7.94 for 1889 shares on the 25th March 2020
PNV @ $1.53 for 9803 shares on the 25th March 2020
NAN @ $5.45 for 2752 shares on the 27th March 2020
SLC @ $0.54 for 27777 shares on the 27th March 2020

View attachment 102010

View attachment 102012





View attachment 102015





View attachment 102013




View attachment 102014


Tracking
I'll report when positions are sold & a summary at the end when the last position is sold. With the current turbulent trading at the moment every strategy will be under pressure to perform so the next few weeks will be a good test to see if "The Ducati Daily Strategy" from Duc ideas are "wildly successful or a dog's dinner" - his words not mine.

So far so good
Two thumbs up at this stage..



View attachment 102017

Skate.

So they seem to be jogging along nicely atm. I'll check back later today after work and see how they are doing.

BTW, you coded (whatever you actually coded) impressively fast.

jog on
duc

 

[lindsayf]

It's a mirror of itself
The pattern is just mirror of itself, if that helps - If you can't work it out - let me know & I'll show you the mirrored pattern.

View attachment 101963

This is the answer

View attachment 101964

We see patterns everywhere
Humans have a unique ability to spot patterns to understand the visual world. Pattern recognition is for our survival as a species & sometimes our mind deceives us presenting pattern when in fact there isn't any. We unconsciously take for granted how good we are we at making sense of what our eyes show us but sometimes we don't appreciate how tough some are to solve.

Skate.

Hmmm...I still dont see how that is the ‘solution’ to that problem, based on how you have described it. Can you explain further?

 

[Skate]

Hmmm...I still dont see how that is the ‘solution’ to that problem, based on how you have described it. Can you explain further?

What was the answer to the puzzle
When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. The hieroglyphics below was "all" that was on the paper. After studying the pattern I wondered if they required:

(a) an explanation what the pattern was or
(b) did they want the next pattern to be drawn (that was a major decision)

My thinking
@lindsayf, let me walk you through it. My thinking was that the "pencil is for drawing" - so I drew the next pattern. In my mind I had a 50/50 chance of getting it correct.

The test

The answer

With the mirror removed

Skate.

 

[Skate]

I am aware of the 'algos', are often visible during low volume periods that is not enough to break the 'trend' that is tied to a volatility measure. The programmers use multiple inputs that I believe is 'volatility' & Value Funds, will not buy long into high volatility. Their buying, creates a bottom in the market that pushes volatility higher so "volatility and cash/volume are two inputs". Given that your systems are cycling you in and out of stocks, from your perspective, I agree the entry is almost irrelevant as you buy high to sell higher. In this scenario, the exit is all encompassing. Your GTFO trigger seemed to work as well as anything and better than most. You will (obviously) have to programme into your systems some form of indicator. (Volatility & Volume) within a trend

So they seem to be jogging along nicely atm. I'll check back later today after work and see how they are doing. BTW, you coded (whatever you actually coded) impressively fast. duc

@ducati916, I hope you don't mind but I have condensed your post so you can understand what motivated me to code "The Ducati Daily Blue Bar strategy". The hardest part was using two indicators that I've not used before making them work "hand in glove". There is only 5 lines of actual code doing all the heavy lifting - the rest of the coding is to make the chart look pretty & easy to read.

Duc's key words.
1. "Volume"
2. The trend is tied to a "volatility measure" taken from the VIX or "other sources"
3. So "volatility & volume" are the two inputs

"The Ducati Daily Blue Bar strategy"
The strategy was quick to code because you stripped trading back to the bare basics "volatility & volume" the drivers of a trend. Once again it proves "simple" works.

Skate.

 

[Skate]

Mr Skate esquire, I would be interested to see the ducs blue bars indicator on NCZ ? Wondering what I am seeing that others aren't? F.Rock

Minor update
As @frugal.rock has shown interest in the security "NCZ" it's been added to the buy list of "The Ducati Daily Blue Bar strategy" making a 8 position portfolio.

The Ducati Daily Strategy
Start Date: 18th March 2020
Portfolio Capital: $120,000
Positions in the Portfolio: 8
Fixed Position Sizing: $15,000

The buys have increased by one
TNE @ $7.00 for 2142 shares on the 18th March 2020
PPH @ $2.99 for 5016 shares on the 23rd March 2020
BTH @ $0.47 for 31914 shares on the 25th March 2020
NXT @ $7.94 for 1889 shares on the 25th March 2020
PNV @ $1.53 for 9803 shares on the 25th March 2020
NAN @ $5.45 for 2752 shares on the 27th March 2020
SLC @ $0.54 for 27777 shares on the 27th March 2020
NCZ @ $0.076 for 197368 shares on the 27th March 2020

Skate.

 

[Newt]

What was the answer to the puzzle
When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. The hieroglyphics below was "all" that was on the paper. After studying the pattern I wondered if they required:

(a) an explanation what the pattern was or
(b) did they want the next pattern to be drawn (that was a major decision)

My thinking
@lindsayf, let me walk you through it. My thinking was that the "pencil is for drawing" - so I drew the next pattern. In my mind I had a 50/50 chance of getting it correct.

The test

The answer

With the mirror removed

Skate.

NOOooooo.....! - the pics for the answer are missing.
Please put us out of our misery Skate!

 

[Skate]

NOOooooo.....! - the pics for the answer are missing.
Please put us out of our misery Skate!

Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.



Let me know if you can't see the pictures & I'll upload them again separately.

Skate.

 

[Country Lad]

Mr Skate, I have not been following "The Ducati Daily Blue Bar strategy" closely and had only a quick look at the charts. However, looking at some companies I am following/trading, it appears to me that the strategy would have given blue bar “Buy”, particularly around the 20 to 26 March time frame for those numerous shares which are following the XAO pattern.

 

[Newt]

Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.

View attachment 102031

Let me know if you can't see the pictures & I'll upload them again separately.

Skate.

Wow. I seem to recall Bankcard numerals being very skewed and "70s font" - probably so computer legible. Have always been crap at cryptic crosswords, but I wouldn't have seen this before the sun froze over!!!

They were a bit evil with the characters used - if 2 and 4 were a bit more obvious for example would have made it a lot easier.

Well done figuring it out too BTW Skate......

 

[qldfrog]

Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.

View attachment 102031

Let me know if you can't see the pictures & I'll upload them again separately.

Skate.

Thanks, the funny thing is that i though mirror..as noted at the time but did it against the whole image horizontal and went no where
Well done to have found it, i would not...

 

[Skate]

Mr Skate, I have not been following "The Ducati Daily Blue Bar strategy" closely and had only a quick look at the charts. However, looking at some companies I am following/trading, it appears to me that the strategy would have given blue bar “Buy”, particularly around the 20 to 26 March time frame for those numerous shares which are following the XAO pattern.

Volatility & volume within a up-trend
"The Ducati Daily Blue Bar strategy" signaled the turn in "volatility & volume" (the first blue bar) on 25th March 2020 & those numerous positions share a correlation because they are following the upswing of the "XAO" pattern. Just to be clear, not all securities are enjoying today's recovery proving the positions that you are following/trading are enjoying increased "volatility & volume" at the moment.

@Country Lad thank you for taking an interest in "The Ducati Daily Blue Bar strategy". On face value, Duc's idea works seamlessly picking the increased "volatility & volume" of individual positions as well as the "XAO".

The XAO Chart
I have attached the chart for the All Ordinaries "XAO" to display that the increased "volatility & volume" indicated by the "Blue" bars commencing on the 25th March 2020.



Also
I don't know if you can see the little dot on the end of the price bars, they signal whether it was an up day or not - minor but important to me

Skate.

 

[aus_trader]

Thank you for the good work you are doing Skate.

Markets can be scary in times of big falls (like at the end of 2018) and crashes like this one. I missed the bulk of the recovery that started in 2019 due to staying out of the market because of the fear , having liquidated late 2018. Should've stayed glued to this thread and those of Peter2's as you guys were investing right from the start of 2019 recovery.

Although we don't know if the bottom has been reached I think it gives me enough confidence to have a nibble here and there.

Cheers and off to do some research to find if there is any diamonds in the rough...