Dump it Here

[Skate]

A comparison to a live trading strategy
The previous backtest results posted above are for 3 strategies "under evaluation" & 3 completed "parked strategies"

The HYBRID Strategy
The backtest results below is from one of my "Live" trading strategies (The HYBRID Strategy) Why? for a direct comparison to the backtest in the previous posts above.




Skate.

 

[qldfrog]

@Skate, thanks for all this data.Sadly unable to give it the time it deserves yet, hopefully will be able to process these info in a couple weeks;
Absence of comments does not always equals showing disinterest
Great job!!!

 

[Skate]

Skate.

 

[Skate]

AMI 26,315 @ $0.54


IFN 17,916 @ $0.96




Skate.

 

[Skate]

AMI 28,070 @ $0.54
WZR 66,666 @ $0.21



CLQ 88,405 @ $0.18
IMA 79,565 @ $0.20




Skate.

 

[Fury]

Hi Skate,
Truly appreciate the information overload you're providing.
As someone relatively new to trading i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize. I think this is an incredibly valuable point you are trying to drill home as opposed to the "what stock should i buy" question that constantly gets thrown around on other mediums.
Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: what momentum indicators are being used) i'm finding it hard to determine what you're doing behind the scenes.
All I can do is run my own evaluation on your buy and sell items to try and determine if they suit (to my limited knowledge).

Looking at IFN for instance, I see the following:
- Volume has increased this week but price has not followed.
- RSI is above 50, below 70 (also showing bearish divergence)
- Stoch is a touch above 80 (maybe overbought)
- Stoch RSI is around 50
- MACD signal line is above (maybe close to cross)
- 4MA's appear to be aligned correctly (probably not as relevant)

I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet...
I'll continue playing along at home

 

[qldfrog]

Hi Skate,
Truly appreciate the information overload you're providing.
As someone relatively new to trading i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize. I think this is an incredibly valuable point you are trying to drill home as opposed to the "what stock should i buy" question that constantly gets thrown around on other mediums.
Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: what momentum indicators are being used) i'm finding it hard to determine what you're doing behind the scenes.
All I can do is run my own evaluation on your buy and sell items to try and determine if they suit (to my limited knowledge).

Looking at IFN for instance, I see the following:
- Volume has increased this week but price has not followed.
- RSI is above 50, below 70 (also showing bearish divergence)
- Stoch is a touch above 80 (maybe overbought)
- Stoch RSI is around 50
- MACD signal line is above (maybe close to cross)
- 4MA's appear to be aligned correctly (probably not as relevant)

I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet...
I'll continue playing along at home

One of the beauty to system trading is you are removed from announcements balancw sheets etc
But ifn is under a takeover attempt.you may or not...decide to exclude it from your systems as these stocks usually display unusual behaviour
My 2c on this specific stock

 

[Fury]

And to look at the other side of the equation...
AMI
- Volume is slightly increased over previous weeks although it is higher post covid than pre covid.
- RSI is just above 50, below 70 (also showing bearish divergence)
- Stoch is below 50 but trending up
- Stoch RSI is below 50 but trending up
- MACD signal line is above and trending down
- 4MA's - 100ma is below the 200ma, but all are trending up.

I'm completely unsure about your sell signal on this one, especially with the price of gold increasing and hitting ATH's.

 

[Country Lad]

And to look at the other side of the equation...
AMI
- Volume is slightly increased over previous weeks although it is higher post covid than pre covid.
- RSI is just above 50, below 70 (also showing bearish divergence)
- Stoch is below 50 but trending up
- Stoch RSI is below 50 but trending up
- MACD signal line is above and trending down
- 4MA's - 100ma is below the 200ma, but all are trending up.

I'm completely unsure about your sell signal on this one, especially with the price of gold increasing and hitting ATH's.

@Fury it may be best to have a look at another share to follow Mr Skates systems. IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending. The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.

 

[Fury]

@Fury it may be best to have a look at another share to follow Mr Skates systems. IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending. The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.

Noted, I will play a long at home in following weeks

 

[Skate]

Hi Skate, Truly appreciate the information overload you're providing. As someone relatively new to trading i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize. I think this is an incredibly valuable point you are trying to drill home. Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: what momentum indicators are being used) i'm finding it hard to determine what you're doing behind the scenes. "Looking at IFN for instance"
I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet... I'll continue playing along at home

@Fury you have raised two posts that need to be answered. I've been waiting to see if others would answer your posts as it can be unhealthy hearing one person's point of view all the time. It was encouraging to read in your first post "my bolding": "I'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers I care to utilize" kudos for doing this!

You said: "What momentum indicators are being used"
Well frankly, it doesn't matter. There are so many momentum indicators out there you are spoilt for choice. I've recently made a post about the old humble (RSI) indicator so I will use the (RSI) & apply it to the chart of (INF) in two different time frames.

The (RSI) Indicator (recapping)
The (RSI) identifies potentially overbought & oversold levels that may reverse direction. However, its default lookback period of (14) doesn't work well as the price tends to remain in limbo between its 30 & 70 levels for long periods, catching fairly large drawdowns before reaching overbought or oversold levels. Decreasing the lookback period increases the indicators’ sensitivity. I simply optimised the 14-period (RSI) to a smaller-period.

I'll answer your 2 posts over a series as I want to explain it in a few different ways
Learning from others shouldn't be underestimated. As an example, if traders wanted to make easy money (in the next series of charts) buy Duc's blue bars & sell the red ones. Even in its RAW state, buying & selling the coloured bars you would be rolling in dough. I'll be using The "Duc Strategy" to add a bit more flavour for others to follow along. Give me a few minutes to capture some charts for the explanation.

Skate.

 

[Skate]

@Fury it may be best to have a look at another share to follow Mr Skates systems. IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending. The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.

@Fury, @Country Lad raises a very important point of having a "Trading Plan".

"A Trading Plan"
A trading plan "decides" if you will enter a new position, not the strategy.

When systematic trading
A "Trading Plan" trumps a "Trading Strategy". Buy & sell signals are generated using a mathematical formula & nothing more. One of my trading rules is that I don't buy a position until I have checked the announcements & I will not take a new "buy position" that is under a "takeover offer" or a "scheme of arrangement". Another rule is: I will sell a position that is currently held "after a week" of a "take over" being advised & not before.

Paper Trading
When paper trading a strategy you are trading the raw signals that are "not conditional" of a "Trading Plan". The "HappyCat Strategy" is being paper traded & it trades the raw signals that the "Exploration Analysis" coughs up. FYI, the signals have been ranked, positionsized with the "pre-auction buy & sell offer". Paper trading is a "confirmation" stage. The strategy undergoing this stage will confirm if there is an alignment with the backtest as "most times" they fail to live up to expectations (IMHO).

Live trading off backtest results "guarantees" you will be a millionaire in a decade.
But in reality, live trading on the backtest results, I can "guarantee" you that you'll be a "pauper" quick smart.

IFN
Let's forget about the off-market takeover offer & make some "raw" assumptions. There will be more-to-follow after I make a few posts that will hopefully tie everything together.

Skate.

 

[Skate]

Skate.

 

[Skate]

Forever indebted to many of you for the constant inspiration, stimulation, and backside kicks from time to time. Don't want to affect new traders here too much until I have a better track record under my belt, but greatly appreciate the time and effort so many put in to sharing performance and learning here. "Never underestimate the benefit of frank benchmarking against your peers"

A catalysis
After @Newt made those comments I decided to post up some backtest results yesterday of a few of my strategies "under evaluation" as well as some parked "completed" strategies. Trading is a lonely exercise & mostly boring. Seeing what other traders are up to goes somewhat to benchmark your own ongoing progress. The COVID-19 flash crash not only displayed the importance of emotions & trader sentiment but also allowed you to have a glimpse of how other traders handled the situation that was presented. Unfortunately, not everyone saw it as an opportunity at the time.

Decisions
As in life, trading is all about making one decision after another. While I was posting my wife asked me a question breaking my concentration at the time that's worthy of a post in itself.

Skate.

 

[Skate]

I play tennis with a guy called Bob. He's very consistent and I know the rallies will be long when Bob's on the other side of the net. I try to hit a winner against Bob and he just waits for me to make a mistake. Bob wins more points than I do.

I have a neighbour called "Bob"
Bob, my next-door neighbour & I "use to" play cards every day. Yesterday it was raining so I decided to make a few posts being a slow day. My wife broke my concentration by asking me a question.

Mrs Skate, "Why don't you play cards with Bob anymore?"
Skate, "Would you play with a cheat & a liar"
Mrs Skate, "No I wouldn't"
Skate, "Neither will Bob"

Skate.

 

[Skate]

Looking at IFN for instance, I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet...

Trying to figure out trading can be frustrating
Brains are an overrated attribute when it comes to trading. Smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious. The market is very emotional & illogical at times & if you are too analytical, you will be surprised often.

Using logic to argue with a lunatic is useless
Using logic to figure what the market might do on any given day is equally useless.

I'm going from memory
I read years ago about two "Nobel Prize winners" for economics. My recollection can be a little fuzzy but the story will deliver the point I'm trying to make. Robert Merton & Myron Scholes both University teachers got together & developed a formula for evaluating stock options. Splitting the one million dollar prize money they now had the chance to put their theory into practice. Their trading didn't go as expected & in the process, they lost their money, who would have thought.

Why do traders lose at trading?
The answer is that we are humans not machines. When it comes to trading you need to be clinical, resist being emotional & irrational. We are not wired to trade successfully & to overcome that weakness you have to have a system, a trading system or trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.

Trading is a basic process
Let's not try to make it complicated. I'll explain more about trading before we move on to answer your concerns about (IFN) & (AMI)

Skate.

 

[Skate]

Trading is a basic process
When you strip back trading it's all about trading the price differential, catching trends, knowing when to get in & when to get out. Money management takes care of the rest.

Price differential
I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride. Trends are happening in all timeframes & picking the strong movers is the secret. Knowing when to hop-on & hop-off is the tricky part & the purchase "needs to be timed". Timing is everything in this game.

Trading systematically
To be honest, my strike rate of winners is around 50%, so half of the time my strategy is okay but sufficient enough to be profitable on balance. My research suggests that successful traders use technicals which is another way of saying - they use a "mechanical trading system". The vast majority of these successful traders have developed their own specific methodology combining rigorous risk management & testing.

Beginners
They all have trouble finding their own level at times without realising how time-consuming it is & most never want to put in that level of effort. Reading is one thing, memorising is another. Sadly we have lost the art to memorise important information.

The evidence (it happens to us all)
Someone telling a story will at times get lost & ask "what was I just saying as I've lost my train of thought" - normally most will struggle to answer that because they were not listening.

I don't tell jokes
People have lost the art of listening & because of this I don't tell jokes. I realise most don't listen to your joke because they are thinking of a joke to tell you in return.

Skate.

 

[Skate]

Trading has no rules
Trading is "Bat-**** scary" for beginners because there are "NO" rules. When it comes to trading most will not take the time to self educate & formulate a trading plan encapsulating a series of rules to follow.

It happens with great regularity
I've educated more people than I care to remember & most will make the same statement with pride "I'm now fully qualified". They fail to realise that they are now fully qualified to "learn on their own". Learning is a never-ending process.

Education is the key.
“Education is something that is done to you. Learning is something you do for yourself."

The Action Strategy
The "Action Strategy" is from the wisdom of another member. @ducati916 drops gems all over the place with great regularity, collecting them & joining the dots has given rise to a trading strategy (The Action Strategy) FYI, others have had the courage to invest along with this strategy.

This is how the "Action Strategy" got its name
“If what you learn leads to knowledge, you become a fool but if what you learn leads to "Action", you can become wealthy”

Skate.

 

[ducati916]

Why do traders lose at trading?
The answer is that we are humans not machines. When it comes to trading you need to be clinical, resist being emotional & irrational. We are not wired to trade successfully & to overcome that weakness you have to have a system, a trading system or trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.

Trading is competitive. It is a competition where there are winners and losers. It is not necessarily a zero sum game, but it is close in most respects. If you do not learn the rules of the game (competition) you will lose and probably lose big. This should inform you that it is not simply what you do: ie. your strategy/tactic/system, but how other market participants are actually going to attack that system. Is your system and more importantly, are you, ready to be punched in the face? It was Tyson who said, 'everybody has a plan until they get punched in the face'. You will be punched. You will be suckered, misled, lied to and everything in-between, by everybody: the companies financials, market makers, the media, other market participants dressing the tape.

To survive and thrive in this gladiatorial arena you must first intimately understand your edge and where it comes from. Where it works, where it doesn't. Where it doesn't, you do not trade that market, sector, stock, whatever.

So this thread is where the systems chaps hang out.

You have a system. It trades 'X'. It is backtested, drawdown does not exceed 23% across a market history of 10 years. Looks good. You forward test it, drawdown does not exceed 17.5%. Looks good. You trade it live. You immediately go into drawdown over a period of 3 weeks by let's say 39%. Is your system broken? What do you actually do at this point? If you cannot answer this question, you have no business in the markets yet.

I'm interested in the answers.

jog on
duc

 

[Skate]

So this thread is where the systems chaps hang out.

Duc I was just about to make a post about a simple strategy that uses volatility & volume
"The Ducati Blue Bar Strategy" when it comes to a trading strategy is simple in design & structure as it incorporates (volatility & volume). As traders, we don't need a fancy strategy to make money. If you traded nothing but the blue & red bars of the "The Ducati Blue Bar Strategy" you would be tripping over yourself going to the bank, it's that good.

I trade the price differentials
"The Ducati Blue Bar Strategy" is uncannily accurate when applied to all timeframes, the signals are fast & snappy. Adding prudent "Money management" with a sharp "PositionScore" brings this strategy to life. Trading the bounce (the blue bars) has been very profitable so far.

Trading the bounce
The "Ducati Blue Bar Strategy" trades the "bounce" by picking when a trend turns using two indicators "volatility & volume". If the trend is up (Blue Bars) we buy & if the trend is down (Red Bars) we sell - the strategy is simple, effective & clean. Duc, your idea using "volatility & volume" to generate signals is clever but with the right "Parameters, Filters & PositionScore" the profitability of the strategy jumps off the charts.

I'll use the "Ducati Blue Bar Strategy" charts for demonstration purposes
@Fury questions related to momentum so I want to post some "visual" example of how the "HappyCat Strategy" uses momentum to enter & exit a position using an (RSI) indicator explaining what I've done to get it to work in my favour. I will use the two securities in question (IFN) & (AMI) & the "Ducati Blue Bar Strategy" chart.

The (RSI) Indicator (recapping)
The (RSI) identifies potentially overbought & oversold levels that may reverse direction as it's a momentum indicator. However, its default lookback period of (14/15) doesn't work well. My aim was to improve the sensitivity of the indicator while at the same time "colour code" the (RSI) line to indicate when the momentum is on & when it's off.

Skate.