Dump it Here

[DaveTrade]

I would think anyone who is starting out or in fact anyone, no matter how experienced should always trade only to the limit of their comfort zone and limit their risk to the amount they are prepared to lose, so there should be no serious mistakes made. Mistakes should actually be viewed as an asset in order to gain greater understanding.
However, just my thoughts and I am not talking about an automated computer system of course!

Wise words for all traders.

PS: Doesn't apply to gamblers.

 

[Ann]

PS: Doesn't apply to gamblers.

Very true, DaveTrade. Gamblers play the odds to win, although no doubt the gamblers amongst us may well say there is a learned skill to that as well, only achieved through experience.

 

[frugal.rock]

B.J. Neblett — ‘We are the sum total of our experiences. Those experiences – be they positive or negative – make us the person we are, at any given point... ​

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[peter2]

Good to see both systems working their way out of their recent draw downs. They could do this because of two things, their positive edge and the fact that they continued to trade to their plans.

IMO working through a period of draw down has got to be the hardest time for new or inexperienced traders. It's during this time that their confidence in their system(s) are really tested. Have you got what it takes to be a profitable trader?

Edit: Flying Bat not there yet, but it will make it soon.

 

[Skate]

Good to see both systems working their way out of their recent draw downs. They could do this because of two things, their positive edge and the fact that they continued to trade to their plans.

IMO working through a period of draw down has got to be the hardest time for new or inexperienced traders. It's during this time that their confidence in their system(s) are really tested. Have you got what it takes to be a profitable trader?

Edit: Flying Bat not there yet, but it will make it soon.

@peter2 you are absolutely correct on every point you have mentioned. With all trading systems, I've always found that it takes time for them to develop into profits no matter how good a system backtests.

Trading systems aren’t perfect
But that's really not the point. Trading systems "just need to be useful” over time.

Trading is a slow process when safety is your main concern
Confidence in your own work goes a long way in helping you trade through a series of drawdowns. System trading's main advantage is that it has mathematically defined “precise” entry & exit points deciding what to "trade" when to "buy" & when to "sell". Meaning there is never any pressure to make judgment calls.

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[investtrader]

I am guessing the PAN exit is profit take type exit or target? The narration says 'STALE'.

Can I ask what universe you are trading? Thanks

 

[Skate]

I am guessing the PAN exit is profit take type exit or target? The narration says 'STALE'.

I also hate reading long-winded posts (my apologies in advance)
@investtrader the StaleStop exit is correct. My "StaleStop Exit" is a combination of 6 exit conditions being met & is extremely difficult for me to explain simply without explaining the complex coding involved.

Rapid changes in price
First off the "Stale Stop Exit Strategy" is to gauge when momentum is shifting, slowing, or reducing but there are other conditions that need consideration as well. There are multilayers to the "StaleStop Exit" as momentum needs to be calculated bar-by-bar from every angle as well as the relationship to previous bars.

Why is this so important?
For this very reason "spikes" in either direction, that fall outside the relationship to previous bars means something has shifted, something has changed that is usually only explained later. I'm saying these shifts can proceed an "official announcement" & my way of thinking it's better to be "safe" than "sorry". Traders hate uncertainty & I'm the same.

Clarification
Many moons ago I would have every StaleStop separated with their individual column in the "Exploration Analysis" for debugging purposes. Over the period I've become more minimalistic as far as reporting goes. Also, the "StaleStop Exit" does not use the Minimum, Maximum, or Average metric but more with the "Relationship" to previous bars.

The Exit condition
I now use only 3 coloured arrows as well as the wording printed on the chart to denote the exit application that has been used. Simplicity with visuals aids is so handy when looking at multiple charts. As they say "a picture paints a thousand words". A "StaleStop Exit" correctly implemented keeps all my strategies in rotation mode.

Colour Coding
1. (Green Arrow = Take Profit Stop Exit),
2. (Yellow Arrow = StaleStop Exit) &
3. (Red Arrow = Trailing Stop Exit)

The StaleStop (measured bar-by-bar)
(a) The StaleStop exits after a certain number of bars when there is a loss in momentum.
(b) The StaleStop also will execute after a percentile drop of the ROC filter over a "nPeriod" from the High of the entry price. (the buy price)
(c) A simple GMMA exit (simple & effective) without going into detail.
(d) An unhealthy relationship between MACD & StochD over a "nPeriod" to the most recent bar.
(e) The UlcerUp indicator falls out of range.
(f) The "GTFO" indicator has been activated.

The "Stale Stop Exit" I use appears complicated & it is
Well, using a standard stand-alone "Trailing Stop" exit doesn't cut it in many ways as a "Trailing Stop" will give back so much open profit & makes the drawdown look pathetic. I enter on a confirmed trend & when the trend loses steam I want to be off the ride. The only issue is when trading a weekly strategy you need to endure the "weekly volatility".

The Take profit Stop
The "take profit stop" is simply an ATR (4) profit stop. We are chart "experts in hindsight" but system trading picks the moves in real-time. Also using a "Take Profit Stop" these days is certainly a sign of the times adopting this feature allows you to take advantage of the shift in trading since COVID. I've spent endless hours trying to code a strategy to reduce the emotional stress of trading. Limiting drawdowns always come at a cost & integrating a "Take Profit Stop" has certainly helped in this regard. Using a "Take Profit Exit" locks in the profit allowing us to "immediately" look for the next ride.

It's prudent
I should point out at this stage that all trend-following systems need to trade when the markets are bullish to achieve good results. Conversely, trend trading systems will struggle to produce reasonable profits when markets are down-trending or going sideways which is on full display with "The Flying Bat Strategy" recently posted results, but at least it allows me to trade every week otherwise trading becomes boring.

Chart for PAN
For full disclosure, I have attached the chart with notations for clarification.



Also, to answer your other question
I trade the ASX All Ordinaries.

Skate.

 

[investtrader]

Thanks for the excellent description. Obviously a lot of work went into your exits - which are way more important than entries.
I have gone 'simpler' , more long term and I mix in fundamentals. It is slightly annoying to see big individual trade drawdowns but it is the price you pay for a riding longer trends. I have found my /technical fundamental ports performed way better in this last 3 months than purely technical.

 

[Skate]

I have found my /technical fundamental ports performed way better in this last 3 months than purely technical.

Preamble
@investtrader, first off, let me say thank you for taking the time to read my posts in the "Dump it here" thread as I appreciate those who make the effort to understand my point of view or the methodology of my trading method. When others don't agree it's always refreshing when they explain their "alternative" rather than telling me when I'm "wrong".

What I'm trying to point out
There is no right or wrong way when it comes to trading, rather it's a personal endeavor.

Back to the point you raised
Those who find a method of trading, in my opinion, have really nailed it. Ultimately you have to find what works for yourself so you can sleep at night as this is "the most important" aspect of trading.

Trading a combination of ideas
When you have arrived at an approach that works for you, you have found your "Holy Grail". Trading is all about trial & error. After you develop a style, it is important to stick with it & not give up just because you don’t make immediate progress. We all have different levels of risk tolerance, patience, activity, & different approaches to handling the emotional ups & downs of the markets. What is comfortable for you will drive another to distraction & if you can appreciate that fact, arriving at a style that works for you is easier.

I'll leave the last word to @ducati916

It is the discipline brought by the individual that is important.

Skate.

 

[investtrader]

Absolutely 100% agree. Find a method/s that works for you then have 100% confidence to trade it - that is indeed the holy grail. Way harder than it looks and why most fail.
Just to add for other members benefit - I have live tested my method now for about three years. This is the equity curve (live for last 12 months). Pity I didn't allocate more funds to it.

 

[Skate]

the equity curve (live for last 12 months). Pity I didn't allocate more funds to it.

The Key to Success
In hindsight, everything is crystal clear but with trading, no one knows what tomorrow will bring. The key to success is properly managing your investments after you buy them. As you have pointed out investing is not a rigid, structured approach & what works best is highly subjective. I posted the words from @ducati916 to indicate that "you" have made a system work that needs congratulating.

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[qldfrog]

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Skate.

the bat is reaching for the sky, leaving that lead footed shiny Platinum showoff behind