Dump it Here

[Skate]

First off
I want to say I use "heaps of filters" with my trading. At times the terminology we use like "market regime filters" & "Index Filters" means much the same to me but something different to others.

Perfection
When trading we all should be aiming for "perfection" which means, doing everything to the best of our ability & anything short of that shouldn't be acceptable. (AFAIC)

Timing the entry
Everyone has heard the expression that a "tide lifts all boats" & in trading, they are referring to market timing. Basically, an "entry condition" changes into a "buy condition" when all filters & parameters have been met to "time the entry".

What filters time the entry?
Well, there are heap & heaps, some better than others. Use the "search" feature as this forum is chock full of them. Google should be your second choice for information.

Skate.

 

[DaveDaGr8]

For anyone currently in drawdown.

 

[Skate]

View attachment 143001


For anyone currently in drawdown.

@DaveDaGr8, you used the word "anyone" did you mean to say "everyone"?

Skate.

 

[Skate]

The market will rebound, won't it?
The markets can be unkind at times & the recent poor run is no exception.

Cricky, when should I have pulled the pin & exited those losing positions?
In hindsight, it all looks perfectly clear but in the heat of trading, your mind starts playing tricks. No trader likes to lose so they start to make up stories to convince themselves that they are doing the right thing whereas that thinking is completely irrational & only leads to further disappointment.

Have you ever had these thoughts? (I bet you have)
(1) “I’ve held on to this stock this long, so I might as well continue to hold.”
(2) "I'm sure it will rebound"
(3) "It can't go any lower".
(4) ets, etc, the list is enormous.

Poor thinking
Ultimately, that logic leads to giving back big gains or incurring bigger losses. Traders are often paralysed into inaction by concluding that it is too late to sell a stock that is already down substantially. This way of thinking keeps you emotionally & financially tied to underperforming positions & can cost you substantially while you wait & hope for a recovery.

Skate.

 

[Skate]

Nope, it’s never too late
It's never too late to sell a stock in which you have a large loss. Being undisciplined & letting losses get out of hand on a regular basis won't last long because you won't have the required funds or the courage to keep trading.

But what if I sell & then it goes back up?
What if you don't sell & it keeps going down? Heck, if it rebounds, there is nothing stopping you from buying it back. One of the big benefits of selling a position in which you have a large loss is that it often frees you up mentally & allows you to gain a fresh perspective. When the misery of that big loss is suddenly removed you will feel a surge of energy & be surprised at how readily you can find other opportunities that will help you make up for your loss.

Cutting losses quickly & protecting capital is the key to outperforming the market over the long run
The market will always offer opportunities in which to profit, so we need to make sure we always have capital that isn’t tied up in underperforming stocks. We all know that drawdowns are part of the trading process, so take it on the chin and be the ‘best loser’ you can possibly be.

In this game, perfection is required
When I say "perfection" I mean doing everything to the best of your ability.

Skate.

 

[Skate]

What makes traders doubt themselves?
Frankly, the inexperienced traders that move into defensive mode when under stress tend to fall back on gut instinct, which quickly overrides the "perfection" required that I've spoken about before.

Perception of the markets can cause emotional stress
If you have not been through a full market cycle, including a bear market, it will be very difficult for you to properly assess your reaction in times like we are experiencing at the moment. I've found over time that we all tend to focus on the allure of recent past returns when conducting the evaluation of a trading system & downplay the risk because it isn’t in sight. Risk is all about surprises that can spoil the party.

Skate.

 

[Newt]

2 useful trading booster shots for me in recent weeks, from 2 very experienced traders:

The Chartist (Nick Radge):



We all know we have to keep chipping away at it. But while Skate is talking about taking exits and sticking to your system, my eyes widened at how many deviations/mistakes are acceptable reading a post by Peter2 recently. Albeit a discretionary systematic approach, but just a reminder that the system probably knows better than you in the long run if you're trying to "read" market noise:

https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1179324

 

[Skate]

We all know we have to keep chipping away at it. Buy while Skate is talking about taking exits and sticking to your system, my eyes widened at home many deviations/mistakes are acceptable reading a post by Peter2 recently

@Newt, you make a valid point & @peter2 posts are always great to read as they are interesting & stimulating. When posting, we are only repeating what we know with the hope of helping others, hopefully without wasting everyone's time. Since joining this community back in December 2013 I've had the pleasure of reading posts from people I've found interesting & enjoyed reading why they hold those views. I like many others (who are self-opinionated) tend to live in our own world that is sometimes clouded because we view things through our own eyes & not as they really are.

It must be an age thing
I have met some interesting people in my time & found myself hanging on to their every word. Why? because what they had to say was interesting & stimulating. As I'm getting older I'm finding it more difficult to meet those who fit the criteria. Is it only me or are people just getting dumber?

Today's society
Tolerance & patience are the two missing ingredients in today's society, lack of respect for others is another one. It appears when I have nothing positive to say about trading, I start talking crap that tends to be meaningless or repetitive.

Skate.

 

[MovingAverage]

Is it only me or are people just getting dumber?

To answer this question you only have to look at how many people are putting serious dollars into crypto—that alone should give you a clear answer to your question. ?

 

[Sean K]

View attachment 143001


For anyone currently in drawdown.

Geesh, I thought he used stops and didn't trade (or at least stopped posting trades) when the market was going down.

 

[Skate]

View attachment 143001


For anyone currently in drawdown.

Geesh, I thought he used stops and didn't trade (or at least stopped posting trades) when the market was going down.

The markets can be unkind at times & the recent poor run is no exception.

Trading hasn't been kind
If it's tough for Nick, it would be tough for the rest of us. For clarity, I'll post a timeline from the 1st of June to yesterday the 17th of his trading performance.

It's worth remembering
Trading is not easy & the simple truth is "markets are not logical or reasonable" they are emotional, volatile & downright unstable most of the time. Why? because the market is nothing more than a reflection of crowd behaviour - a crowd of people that has absolutely no regard for what anyone thinks. Sometimes it's just a bunch of 'rational' people making 'irrational' decisions.

The markets screw us
The market has the uncanny tendency to screw the most number of people "most of the time" in the shortest amount of time.

Nick's trading results 1st of June 2022
Profit & loss = (-$2,596)



Trading results 2nd of June 2022
Profit & loss = (-$47,403)



Trading results 9th & 10th of June 2022
Profit & loss = (-$33,216)



Trading results 14th of June 2022
Profit & loss = (-$115,517)



Trading results 15th of June 2022
Profit & loss = (-$13,824)



Trading results 16th of June 2022
Profit & loss = (-$183,153)



Trading results 17th of June 2022
Profit & loss = (-$63,049)



Year to date
Nick's YTD results (-$942,291) & with a week & a half to go, I don't think he will do a "Bradbury".

Summary
At times there is "nothing wrong", it's just how the cookie crumbles.

Skate.

 

[ducati916]

Like @Newt I was surprised by the low DD levels seen in the @MovingAverage tables then noticed the low exposure %'s. I assume these parameters are highly correlated. This low exposure level allows some flexibility in the exposure to be included in the system.

I would link the exposure level with current market conditions that are defined by market internals. Rather than an off/on system switch based on an index, the market internals would increase and decrease the level of exposure in the system.

This wouldn't be possible if the system is fully invested most of the time like @Skate's systems.

In this case I'd consider using the market conditions (types) that have been predefined to control the investments between several systems. Back testing would be useful to identify the best market types for each system. There would be an optimal market type for each system whether it's a break-out system, a pull-back system or a reversal system.

Consider the current market, it's not going to provide many break-out setups for quite some time. Reversal setups will be forming first and if the market continues to rally we'll start to see more PB and BO opportunities form.

Correlated well pre-covid, not so well this time. The reason is exactly what happened in 2000. The shite (NASDAQ stocks) broke first. The AMZN's etc now.

However, whenever there is a divergence...extra attention needs to be paid because this bear started as a stealth bear (technically) and you needed to recognise it as such.

A basic scan of the fundamentals combined with the above, gave you ample time to prepare for the bear.

jog on
duc

 

[MovingAverage]

View attachment 143033

Correlated well pre-covid, not so well this time.

What??? He said my DD and exposure were highly correlated, which they absolutely are. My sims are from 1/1/2015 to the date of my post. What am I missing with your comment—why is it not correlated this time??? My sims are on the ASX and you put up a chart of the NYSE

 

[moXJO]

Trading hasn't been kind
If it's tough for Nick, it would be tough for the rest of us. For clarity, I'll post a timeline from the 1st of June to yesterday the 17th of his trading performance.

It's worth remembering
Trading is not easy & the simple truth is "markets are not logical or reasonable" they are emotional, volatile & downright unstable most of the time. Why? because the market is nothing more than a reflection of crowd behaviour - a crowd of people that has absolutely no regard for what anyone thinks. Sometimes it's just a bunch of 'rational' people making 'irrational' decisions.

The markets screw us
The market has the uncanny tendency to screw the most number of people "most of the time" in the shortest amount of time.

Nick's trading results 1st of June 2022
Profit & loss = (-$2,596)

View attachment 143019

Trading results 2nd of June 2022
Profit & loss = (-$47,403)

View attachment 143020

Trading results 9th & 10th of June 2022
Profit & loss = (-$33,216)

View attachment 143021

Trading results 14th of June 2022
Profit & loss = (-$115,517)

View attachment 143022

Trading results 15th of June 2022
Profit & loss = (-$13,824)

View attachment 143023

Trading results 16th of June 2022
Profit & loss = (-$183,153)

View attachment 143024

Trading results 17th of June 2022
Profit & loss = (-$63,049)

View attachment 143025

Year to date
Nick's YTD results (-$942,291) & with a week & a half to go, I don't think he will do a "Bradbury".

Summary
At times there is "nothing wrong", it's just how the cookie crumbles.

Skate.

So many questions.
Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?

If the market stops making sense you should get out and find something that does.

I've had profitable strategies just stop working during certain times of the market cycle. But this looks like a breakdown in trading discipline.

 

[DaveTrade]

So many questions.
Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?

If the market stops making sense you should get out and find something that does.

I've had profitable strategies just stop working during certain times of the market cycle. But this looks like a breakdown in trading discipline.

In my mind it's proof that the guy doesn't know what his doing.

 

[Skate]

So many questions.
Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?

If the market stops making sense you should get out and find something that does.

I've had profitable strategies just stop working during certain times of the market cycle. But this looks like a breakdown in trading discipline.

In my mind it's proof that the guy doesn't know what his doing.

@moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment.

At times bad things can & do happen before an exit signal is generated
It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.

Using analogies
I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish.

I like to use boxing analogies as I can relate to that sport more than most
There have been times when it felt like I was fighting with more than one person in the ring but muscle memory keeps you firing punches. I can tell you with all certainly when you are in the ring you "get punched" a lot & some punches hurt more than others. Even when you win your body feels something different.

Just like boxing
The markets have the uncanny tendency to screw with us & it can hurt in a short amount of time. Unfortunately, there are some times when you just have to suck it up.

In summary
Some waves can give you a real dunking. Other times you don't see the punch coming. As with everything in life, bad things do happen but how you handle them, is the measure of your mettle.

Skate.

 

[DaveTrade]

@moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment.

At times bad things can & do happen before an exit signal is generated
It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.

Using analogies
I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish.

I like to use boxing analogies as I can relate to that sport more than most
There have been times when it felt like I was fighting with more than one person in the ring but muscle memory keeps you firing punches. I can tell you with all certainly when you are in the ring you "get punched" a lot & some punches hurt more than others. Even when you win your body feels something different.

Just like boxing
The markets have the uncanny tendency to screw with us & it can hurt in a short amount of time. Unfortunately, there are some times when you just have to suck it up.

In summary
Some waves can give you a real dunking. Other times you don't see the punch coming. As with everything in life, bad things do happen but how you handle them, is the measure of your mettle.

Skate.

To be fair I should expand on my comment, it was too short and direct. I give Nick credit as a system trader for sticking to the system but I think that the risk management aspect of his system was flawed.

Using analogies
I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish.

I also would say this actually works the other way round for surfing and trading, when the conditions are good it makes an amateur look like a pro and the professional shines through when conditions are bad.

 

[moXJO]

.

@moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment.

At times bad things can & do happen before an exit signal is generated
It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.

Using analogies
I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish.

I like to use boxing analogies as I can relate to that sport more than most
There have been times when it felt like I was fighting with more than one person in the ring but muscle memory keeps you firing punches. I can tell you with all certainly when you are in the ring you "get punched" a lot & some punches hurt more than others. Even when you win your body feels something different.

Just like boxing
The markets have the uncanny tendency to screw with us & it can hurt in a short amount of time. Unfortunately, there are some times when you just have to suck it up.

In summary
Some waves can give you a real dunking. Other times you don't see the punch coming. As with everything in life, bad things do happen but how you handle them, is the measure of your mettle.

Skate.

Surely inflation was the shark in the water covered in flashing lights.
Sometimes the juice aint worth the squeeze.

Did I read that right that he lost $360k in a week?
I'll stick to my gambling. That auto trading looks like a tough gig.

 

[Newt]

I think that's only his US day trading strategy, all other trend system in cash? Guessing would be mean reversion, and markets unstable at the moment. If you guys know more than Radge I'd be happy to read your books, or Twitter offering, or subscribe to your registered trading/training service, or hear about your extensive experience working for a financial institution or, hear of your trading records, or....

Not sure he ever said he had the trading Holy Grail, and sharing his results surely isn't a sin?

 

[DaveTrade]

I think that's only his US day trading strategy, all other trend system in cash? Guessing would be mean reversion, and markets unstable at the moment. If you guys know more than Radge I'd be happy to read your books, or Twitter offering, or subscribe to your registered trading/training service, or hear about your extensive experience working for a financial institution or, hear of your trading records, or....

Not sure he ever said he had the trading Holy Grail, and sharing his results surely isn't a sin?

That's the amazing thing, a guy of his experience letting this happen. I have no answer.