Dump it Here

[ducati916]

One version of the above visualised in 3 charts.



Now there should be a number of takeaways contained therein.

jog on
duc

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[debtfree]

Thanks @Skate for the update.

Quick question in regards to today's purchase PLS.
Is the purchase price correct at 0.43 or is it a typo as I can't see that it got down to that price on my chart.

 

[Skate]

Thanks @Skate for the update.

Quick question in regards to today's purchase PLS.
Is the purchase price correct at 0.43 or is it a typo as I can't see that it got down to that price on my chart.

@debtfree you have an eagle eye. I've left it too late to alter the previous post so I'll correct my mistake & reposted the correct charts shortly

Skate.

 

[Skate]

@debtfree picked up a mistake in my previous HappyCat report & it was too late to alter the previous post so I'll repost the HappyCat Strategy report again correcting my mistake.
































I had one job to do & I stuffed it
So did this guy, he put the wrong cover on the wrong hole - just in case others were wondering why I chose this graphic.


Skate.

 

[Skate]

I'm posting a snippet of an equity curve of one of my portfolios. I'm doing this to reinforce a point that is often made by experienced traders/investors and is overlooked by beginners. I'm also doing this as I'm feeling very satisfied with the work I've done in this portfolio.

The point: Trading profitably is a high performance activity and at the elite level it's predominantly psychological. We know that two people trading the same system can get very different results. The difference is due to the mindsets of the traders. It's been a difficult year for many of us, myself included.

https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1100385

I think the profit factor below is not entirely accurate, or rather, not entirely representative of the system. Why? Well, as soon as I started I had all my stops hit due to the COVID crash. Needless to say, the current win% is pretty good and shows how I clawed back after an immediate and large drawdown from the beginning. (At least that's my justification haha)

Weekly Portfolio - ASX

Week 36 Buy: 12 buys Sell: 1 stale exit Index is up. The XAO gained a lot this week. According to my spreadsheet I gained 3%. Not bad since I'm only 25% invested. According to my current spreadsheet I'm at -3.06% but according to Share Trade Tracker I would be out of drawdown. Something to...

www.aussiestockforums.com

It's refreshing
When members post graphics or trading results as @peter2 & @Warr87 it gives junior members a glimpse into the life of those who actually trade - in the vein of helping others benchmark their own trading results & frankly I'm no different. Sharing information is a way that helps others understand trading a little better.

Benchmarking
2020 has been a challenging trading year. Indicivisness & indecision raised its ugly head when COVID-19 "flash crash" hit with a vengeance - most traders (a) didn't know whether to sit on the sideline or (b) keep having a go, trading through the turbulent times. With some, it was a combination of both.

Charts & results
The recent charts & trading results concentrate on the period from "Jan/Feb 2020" to the results achieved so far this week. In the spirit of sharing, I'll post my equity curve for the same period so others understand how trying it was to trade through a period of uncertainty. Looking over & comparing results from different traders can help crystalise what can be achieved from experienced traders.

It's been tough
A win rate of 39% on face value seems low but in a very volatile trading environment, it's not too shabby. The "Profit Factor" of 2.32 was hard-fought to achieve. It goes to prove if you - "Win more when you win than you lose when you lose" you are halfway there as a half-decent trader.



Skate.

 

[ducati916]

I would disagree with that it is predominantly psychological. Trading at the elite level is, I would argue skill based. The skill required is a designed/built methodology/strategy. At the elite level, everyone is expected to manage psychological issues professionally, unless the system traded is predicated on psychology, then and only then, would a psychological flaw reveal itself, resulting in returns below that which would be expected. As an example, Taleb's style of trading (now managed exclusively by his business partner). This is a purely psychological way of trading, hundreds if not thousands of small losses waiting for the gargantuan win.

Success, which vaults you into the elite level is predicated upon the skill in building/designing a system of trading that consistently, in any market conditions, returns a profit.

There are many styles and niches available to create consistent profits. Mechanical systems are a primary example of a niche style of trading. Taking for the moment, long only systems (which seem to predominate for obvious reasons) are all systems equal in their returns? Most mechanical systems run backtests...are those backtests equivalent? Without even looking at them, I would wager 10c that they are not. Can above average psychological intervention improve a bad system? Probably not. Therefore, improving the system is paramount. Trust me on this, it is a lot easier psychologically to trade a really profitable method than a horrible one.

You saw Peter studying the entry charts of Mr Skate's system, looking to improve (if possible) his system. That is someone seeking continued improvement in skill...not psychology. That is what is required. Executing trades based on trading rules is a given. If you are still struggling with that, then either (a) your strategy is poor or (b) you are trading too large.

jog on
duc

 

[Skate]

Differences
@peter2 remarked "Trading profitably is a high-performance activity and at the elite level, it's predominantly psychological. We know that two people trading the same system can get very different results" - @ducati916 remarks "Trading at the elite level is, I would argue skill-based. The skill required is a designed/built methodology/strategy"

When trading
(a) Having the correct mindset when trading is critical
(b) Trading profitably is definitely skill-based

In a nutshell
I agree with both positions stated by Peter & the Duc as they complement each other.

I would also add
"By not strictly adhering to your trading plan goes a long way to explain why we achieve different results - trading the same system"

Something always works
My equity curve above demonstrates that technical analysis works - The secret using technical analysis is knowing "what will work in the future".

Trading is all about risk, opportunity & probability
Technical traders spend a lot of time formulating a trading strategy & those traders who understand risk, tend to trade more successfully. Accepting the fact that not every trade will work out helps immensely.

Trading doesn't have to be complicated
Trading is all about finding a style & strategy you are comfortable with & simply going for it. When starting out, start trading with small amounts & by doing so you will learn as you go. Losing small amounts is less painful. Having a stake in the game with "your money" on the line - tends to focus you & your "learning will increase tenfold".

Reading charts
Looking at charts we tend to see patterns everywhere & usually well after the fact - that's not helpful. Some trading patterns can help us with our trading while other patterns are worthless - why? our mind has a way of tricking us to see patterns that are simply not there.

The secret to trading profitability is picking when something has changed
Technical Analysis, systematic trading removes the psychological element Peter talks about. When trading, often the simplest tools can work best in confirming when a change has occurred. @ducati916 posts are chock full of charts trying to explain when & where patterns have changed - thus giving all members a fighting chance to exploit it.

Skate.

 

[Warr87]

https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1100385

Weekly Portfolio - ASX

Week 36 Buy: 12 buys Sell: 1 stale exit Index is up. The XAO gained a lot this week. According to my spreadsheet I gained 3%. Not bad since I'm only 25% invested. According to my current spreadsheet I'm at -3.06% but according to Share Trade Tracker I would be out of drawdown. Something to...

www.aussiestockforums.com

It's refreshing
When members post graphics or trading results as @peter2 & @Warr87 it gives junior members a glimpse into the life of those who actually trade - in the vein of helping others benchmark their own trading results & frankly I'm no different. Sharing information is a way that helps others understand trading a little better.

Benchmarking
2020 has been a challenging trading year. Indicivisness & indecision raised its ugly head when COVID-19 "flash crash" hit with a vengeance - most traders (a) didn't know whether to sit on the sideline or (b) keep having a go, trading through the turbulent times. With some, it was a combination of both.

Charts & results
The recent charts & trading results concentrate on the period from "Jan/Feb 2020" to the results achieved so far this week. In the spirit of sharing, I'll post my equity curve for the same period so others understand how trying it was to trade through a period of uncertainty. Looking over & comparing results from different traders can help crystalise what can be achieved from experienced traders.

It's been tough
A win rate of 39% on face value seems low but in a very volatile trading environment, it's not too shabby. The "Profit Factor" of 2.32 was hard-fought to achieve. It goes to prove if you - "Win more when you win than you lose when you lose" you are halfway there as a half-decent trader.

View attachment 114443

Skate.

I don't know how you still kept that profit factor, lol. Your systems were always more responsive than mine. It took me until August to get back to breakeven, which I am taking as a win. The latest market hasn't been kind either. Right back into a drawdown again. I would characterise the current market as volatile sideways. My index filter has been right on the cusp and momentum is being cut short. It's been an odd year. I know even in a sideways market my system will still find a few momentum winners. At least I've proven to myself that when the market is trending upwards I can win (June to August alone was amazing).

 

[Skate]

I don't know how you still kept that profit factor, lol. Your systems were always more responsive than mine. It took me until August to get back to breakeven, which I am taking as a win. The latest market hasn't been kind either. Right back into a drawdown again. I would characterise the current market as volatile sideways.

Horses for courses
@Warr87 I trade multiple strategies & I'm prepared to display each strategy separately in descending order. The first graphic is a combination of my trading strategies. It clearly proves that not all strategies are created equal.

To be fair
Each strategy has a defined job so we are comparing apples & oranges.

FYI
I have 4 parked strategies at the moment that have traded in the past waiting for the ideal conditions to reactivate.

This graphic is a combination of my trading strategies



Strategies are displayed in descending order that needs "Clarification"
Strategy 1 = is my "Buy & Hold" Strategy
Strategy 2 = is my "LIC Investment" Strategy




# Clarification 2
Strategy 3 to 8 are my active trading strategies







The market has been roaring since 6th March 2020
During this period there were a few minor setbacks - but that was expected as "it's just the nature of a recovering market" (@ducati916 has covered this extensively in his thread)



Skate.

 

[Warr87]

Thanks for the additional clarification. It's nice to see how a combined portfolio taking different appraoches can come together. I remember hearing a quote from my audio books (going to paraphrase a little and I can't remember who said it) that a 'newb' trader will try and find the perfect entry/exit for a perfect system. A more experienced trader is looking to accumulate strategies, knowing that there is no perfect entry/exit, or one strategy that will always win. My own performance is hard to qualify given I have changed capital allocation (I was, however, beating the XAO quiet comfortable so happy with that). Ideally i'd like to 'restart' my performance tracking as I don't intend on any more major capital injections right now. I'm now at the point that I'm deploying a CFD/crypto strategy, weekly momentum, and monthly momentum (with a daily momentum in papertrading). A mean-reversion system using ASX200 CFD is also in papertrading. Why? Well, like what you have I want a few systems that trade different because the market changes. I'm looking forward to next year's trading as I think things will improve.

Horses for courses
@Warr87 I trade multiple strategies & I'm prepared to display each strategy separately in descending order. The first graphic is a combination of my trading strategies. It clearly proves that not all strategies are created equal.

To be fair
Each strategy has a defined job so we are comparing apples & oranges.

FYI
I have 4 parked strategies at the moment that have traded in the past waiting for the ideal conditions to reactivate.

This graphic is a combination of my trading strategies

View attachment 114464

Strategies are displayed in descending order that needs "Clarification"
Strategy 1 = is my "Buy & Hold" Strategy
Strategy 2 = is my "LIC Investment" Strategy

View attachment 114465


# Clarification 2
Strategy 3 to 8 are my active trading strategies

View attachment 114466

View attachment 114467

View attachment 114468

The market has been roaring since 6th March 2020
During this period there were a few minor setbacks - but that was expected as "it's just the nature of a recovering market" (@ducati916 has covered this extensively in his thread)

View attachment 114469

Skate.

 

[Newt]

Yes, thanks for sharing Skate. You''re working pretty hard on this trading gig now for someone who sounds like they could just as easily be fully retired and watching Netflix (or Foxtel Boxing?) all day. Is your wife still talking to you?

 

[Newt]

View attachment 114456

I would disagree with that it is predominantly psychological. Trading at the elite level is, I would argue skill based. The skill required is a designed/built methodology/strategy. At the elite level, everyone is expected to manage psychological issues professionally, unless the system traded is predicated on psychology, then and only then, would a psychological flaw reveal itself, resulting in returns below that which would be expected. As an example, Taleb's style of trading (now managed exclusively by his business partner). This is a purely psychological way of trading, hundreds if not thousands of small losses waiting for the gargantuan win.

Success, which vaults you into the elite level is predicated upon the skill in building/designing a system of trading that consistently, in any market conditions, returns a profit.

There are many styles and niches available to create consistent profits. Mechanical systems are a primary example of a niche style of trading. Taking for the moment, long only systems (which seem to predominate for obvious reasons) are all systems equal in their returns? Most mechanical systems run backtests...are those backtests equivalent? Without even looking at them, I would wager 10c that they are not. Can above average psychological intervention improve a bad system? Probably not. Therefore, improving the system is paramount. Trust me on this, it is a lot easier psychologically to trade a really profitable method than a horrible one.

You saw Peter studying the entry charts of Mr Skate's system, looking to improve (if possible) his system. That is someone seeking continued improvement in skill...not psychology. That is what is required. Executing trades based on trading rules is a given. If you are still struggling with that, then either (a) your strategy is poor or (b) you are trading too large.

jog on
duc

I'm reminded of the very first post in this thread Duc. From time to time the "trading table" analogy comes up , and basically it won't be stable with the 4 pillars of edge (strategy), money management, psychology, continuous education and improvement. I suspect the importance of these varies depending on your experience and time trading. Most of us start out just trying to find and edge, and trading is properly (psychology). Later we realise how important risk and money management is. Depending on who your mentor(s) may be, every 5-10 years you realise how little you actually know and may start again from a different viewpoint and potentially all of the above benefit all over again (Dunning-Kruger?).

There's a great trading meme of a beginner trader pushing a giant boulder uphill, and every time he thinks he's reached the top of the mountain there's another of these "pillars" to master, and thus push the boulder up an even steeper slope. Damned if I can find it tonight though!

 

[Skate]

Do NOT pay attention to the technicals, they are NOT relevant in this market. [They] can only see their formulas and technical analysis - analysis which does not work in these market conditions.
What I am saying is that this market is the virus. Understand the aforementioned effect(s) the virus has on the market and you will understand what the market's going to do in this next wave which is not going to happen, but rather, is already underway.

The "Dump it here" thread
I was reminded recently - "The info, research, continued discussion and help is first class and still done in a pleasant environment". It's a reminder that this thread is not a contest of ideas, but a thread that allows alternative ideas & views to be freely expressed, such as those @over9k is currently posting about (COVID-19) & what effects that will have on the markets going forward.

We all know the markets fluctuate
Trading psychology that @peter2 mentioned is something most people don’t think about when trading. However, when trading for yourself, your emotions will have an unavoidable impact on your outcome. Reading alternative views is healthy as it allows us to make an informed choice of how we invest. Every price in the market is the sum of all hopes, fear, pride & greed. Knowing this, technical traders try to capitalise on this information. This is the skill @ducati916 spoke about.

Experience
Therefore 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 ever going to be "average traders" at best "but that’s okay".

Trading is about probabilities
Accepting that there is no "one" easy approach that guarantees success in this game as @Warr87 eluded to - you start to gather a combination of strategies that allows you to "dance to the music being played" - just as the conditions in the markets that COVID-19 has recently caused. Just to reiterate - If it weren't COVID, it would most likely be something else. @over9k is merely expressing a view that "we aren't out of the woods just yet" & an extra layer of caution is required to trade in these uncertain times.

Members expressing an alternative view enriches this thread
Technical Analysis, Fundamental Analysis or a combination of both have a position at the table in this thread, reading alternative trading information adds additional tools for us to make smarter & sharper trading decisions.

Summary
I don't subscribe to the many of the views expressed on this forum - but I do enjoy reading them nevertheless. Having a "closed mind" is the killer of innovation when it comes to trading.

Skate.

 

[ducati916]

Just returning briefly to the psychology/skill question:



Not all strategies are equal. Building a good or highly profitable strategy is not a psychological problem. It is a skill problem.

Where the confusion seems to be arising is: (a) if a novice is provided with a good, profitable system, there is a good chance due to psychological issues, he will lose money: (b) an experienced trader will make money because he will not commit psychological errors, defeating the profitability of the system.

Building the system is an exercise of skill.

A Stanford University Professor, Carol Dweck (confusingly) of the Psychology Dept., provided a paper on 'Mindset'. In it she describes 2 types of mindset: (a) growth and (b) fixed. A growth mindset (is in her research) superior to a fixed one. A growth mindset is one which developed through hard work, good strategies, and input from others. A fixed mindset is one in which the person relies upon innate talent.

It could (fairly) be argued that pursuing a growth mindset is a psychological strength and that therefore psychology is important to elite traders. I would accept that but differentiate it by saying that the psychological effort is directed towards skill acquisition, which for novice traders could well be an improvement in psychological skills. Later, however, additional skills must be aimed at improving profitability through creating higher profitability methods.

jog on
duc

 

[Skate]

Skate.

 

[Warr87]

I never got a fill on PLS (in the happcat strat, my MAP strat got it on monday).

nice to see the happycat coming through.

 

[Skate]

I've had a request
A member was wondering:
(1) how did the Duc-VIX strategy perform this week? &
(2) how did my "live trading" of the VIX go this week?

Duc-VIX strategy has been retired
I've explained that I've already posted the final update of the "Duc-VIX strategy" but I'm willing to post one more update as at the end-of-trade today. I explained I won't be giving weekly updates of the performance of the "VIX live Strategy" - other than to say "it had a great first week".

I was curious why he wanted to know?
Short answer - he was afraid to trade this week because of all the uncertainty of the US elections & the increase in COVID-19 cases around the world.

What a great week to start new strategies
I fully accept that there is never a good time to start trading a new strategy, especially in uncertain times such as the past week - but when the signals are there, "I trade them". I'm a firm believer trading "one week too early or one week too late" makes little difference over the longer term.

I'm glad I started trading on a great first week
I can report - the daily "Live-VIX Strategy" took-off on Monday - straight out of the boxes & all three new strategies are firing.

Duc-Vix Update
As requested, I'll post one more update of the retired "Duc-VIX Strategy" (as at end-of-trade today)





























I have an attitude of gratitude
I must thank @ducati916 once again for his unsolicited help in how I could take advantage of VIX indicator.

Recently
The Duc recently suggested how I could "fine-tune the exit of the VIX Strategy". His exit strategy (his solution) made a good strategy a "great strategy". (thanks Duc)

Definitely
This will be the final update of "Duc-VIX Strategy"



Skate.

 

[Skate]

I've been thinking about the CAM Strategy
The CAM strategy is a great little performer but lacks the punching power of my other trading strategies. The CAM strategy signals depend on pullbacks & continuation of trends. @peter2 explains how he takes advantage of breakouts as well.

This got me thinking
Duc's recent suggestion was to use (Upper & Lower) volatility bands. Incorporating the upper & lower volatility bands on the buy-side as well as the sell-side is a nifty idea, new to me. The original CAM Strategy relies on a few different metrics that I've posted about previously. Using Duc's volatility bands certainly improves the profitability of the CAM Strategy & I'm suggesting those who also trade the CAM Strategy to do the same & investigate how they can be used to improve the trading results of the CAM Strategy.

The exit & entry strategy of the CAM
The original exit has been complemented with an additional volatility exit & a confirmed volatility entry as suggested by @ducati916. Additional volatility filters ultimately decide when the trend is "confirmed" assisting in a cleaner sharper entry. The exit has also been more refined using a lower volatility band to keep you in the better trades.

Adding - Volatility Upper & Lower Bands
Using the upper band & incorporating volatility as an additional entry condition has the benefit of lowering stock turns & reducing false entries. The lower band assists in holding better trades a little longer. My "time delay - momentum exit" has been eliminated. Using the upper & lower band as confirmation of volatility at the individual level has pleasing results when applied to the CAM Strategy, worthy for others to investigate as I have. Using volatility bands for entry & exits is impressive.

Without a doubt, a positive outlook is important when it comes to incorporating new ideas
To that end, believing that your overall trading will be profitable is certainly valuable. However, mismanagement of your trading is another thing. Trading by its very nature is risky, but there are ways to manage & minimise the risks - one risky way of trading is taking on undue amounts of risk or staying too long in a trade that has moved against you – following that path is a recipe for disaster & this is the very area volatility bands tend to eliminate.

In summary
There comes a time when I have to get down off my "Soap Box" as the last thing I want to do is bore readers with stuff that I have posted about previously (In my defence - applying Duc's idea to the CAM Strategy is something new. A refresher of the CAM Strategy is always handy to refocus & re-invigorate a previous strategy that we have discussed & paper traded in this thread, sometimes its fun to go over stuff we tend to forget or neglect)

Backtest Confirmation
Adding volatility bands to the CAM Strategy & the Improvements are obvious. The recent backtest is from the 1st July to end-of-trade Friday the 13th November 2020



Food for thought..

Skate.