Dump it Here

[Skate]

The common old index filter
An index filter is your safety net as it will keep you from trading & it can be as simple as you want it to be. Example, when the index you are trading falls below a pre-set simple moving average the filter will turn off - your strategy should now stop generating any new buy signals.

The flexibility of an Index Filter
Another feature of an index filter is that when the index filter turns off you can have your stop loss tightened so you exit your trade sooner than when the index filter is on. This will lock in profits or stop you losing more money if your position is under water.

Be a wimp with me
When markets fall it means the momentum is falling & it’s time to be cautious when the index is moving lower. Normally an Index will keep moving in the same direction till a price reversal occurs.

How does an Index Filter operate ?
When an index filter turns off it has the ability to protect you against larger losses securing and protecting your precious capital. If the index filter falls below the pre-set moving average the stoploss shortens generating sell signal sooner than when the index filter is on.

Permanent feature
An Index filter should be a permanent feature of any good strategy & when the index drops it’s a time to take notice, it’s time to watch for sell signals.

Skate.

 

[Skate]

When is it safe to trade?
The market has three states of movements, trending upward, trending downward or trending sideways. The ideal time to trading is when the Index you are trading is trending upward.

Back to the Index Filter
An Index filter is the most common way to gauge if the market index is moving higher or lower set against the index and time frame you are trading.

Skate.

 

[Skate]

Money Management
What does Money Management mean in relationship to trading?

This question relates to position sizing.

Amount to trade
It’s about how we proportion the amount of money set aside for trading. The first thing you need to decide is - what dollar value you want to place on each trade.

Include all costs
This consideration should include the commission cost and frequency of your trading style relating to your trading plan. You can divide your capital into five, ten, fifteen or twenty or even forty equal amounts. I personally divide my capital into 40 equal parts.

Skate.

 

[Skate]

Above all you will need a decent account size
I’d suggest 50k minimum
Running a business —-and it is a business is
Impossible if it’s under funded.

Good night!

How much money do we need to start trading?
Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business.

Commission drag
If your trading strategy trades with a high frequency the commission drag will play havoc with your strategies profitability as with any Mean Reversion Strategy.

It can happen
I have heard stories that some have turned a $1,000 investment into $500,000 but I’ve also heard of people winning lotto twice with a single ticket, and for either to happen is pretty rare.

Skate.

 

[Skate]

Having designed and now trading a system expected to return 20% plus per year on average with less than half an hr input per week what are your thoughts on simplifying your investments further by selling off real estate investments, LICs?

willy1111, used 20% as an expected return on investment, whereas I'll use 25% as an example. (it's easier to understand)

The truth is, you need money to make money
Forget about taking a $1000 account and turn it into millions. That is achieved through gambling, not trading. Instead, you should look to make an average of 25% per year (this depends on your risk appetite and trading style).

On a $1000 account, you're looking at an average of $250 per year.
On a $20,000 account, you're looking at an average of $5,000 per year.
On a $50,000 account, you're looking at an average of $12,500 per year.
On a $100,000 account, you're looking at an average of $25,000 per year.
On a $600,000 account, you're looking at an average of $150k per year.
On a $1m account, you're looking at an average of $250k per year.

Get the picture?

This is extremely important, but most traders don’t get it.

There are different ways to profit from the markets
(a) Warren Buffet, considered the world's greatest investor, invest based on fundamental analysis only.(looking at P&L Financials)
(b) Ed Seykota, considered the world's best trader, trades based on technical analysis only. (Chart reading – my method)

Skate.

 

[Skate]

What criteria should you use to pick a stock ?
Well that the $64,000 question, you can either use fundamental analysis (the study of balance sheets, PE ratio, P&L statements, also researching any known facts about the company and its managers even the company’s historical performances) or you can use technical analysis (the study of charts)

What stock criteria do I choose ?
I prefer technical analysis as I believe all that is known about a company, the fundamentals of the company has already been factored into the share price already.

Support and resistance
Human fragility such as greed and fear is what fuels the markets, it’s the very same reason why support and resistance areas are so important. Support and resistance is another way of saying - the top and bottom of a price range.

Psychological barrier
When a support or resistance line is hit there is a psychological barrier to overcome, this is why it hard to push prices past this point.

A "psychological barrier" is really an "emotional Barrier"

Skate.

 

[Skate]

Let me make a post about "Market manipulation"
This manipulation goes on more than you think, the uninformed never realises that this practice is highly orchestrated and planned with precision.

The mug punter
Most Investor loses money because they have a habit of buying at the top and selling at the bottom, the smart money manipulates the price to achieve this result, and it’s the big boys at play. It’s a constant battle between professional investors and us the mug punter and the cards are always stacked against us, something to always keep in the back of your mind.

New batches of suckers are born with every new play.

Rules of engagement
The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally, usually by those who know the rules of engagement.

Skate.

 

[Skate]

Playing pool & traders risk (my simple analogy)

The game of Pool
So you understand the game of ‘Pool’ - Pool is played with a Cue & Balls on a ‘Pool table’ with six pockets along the rails, into which balls are deposited. (Pool has so many meanings)

Risk
Risk is like playing pool, when a ‘pool player' lines up to take the first shot, they may only hit one ball but hitting that one ball scatters so many other balls on the table, and risk is the same, risk has the ability to affect other indexes & it can flow onto individual securities.

Fun Fact
What sport is played in a Tuxedo ?

Answer
Pool

Minnesota Fats
Minnesota Fats arguably one of the best Pool players ever, once made a funny quote: "A Pool player in a Tuxedo is like Ice Cream on a Hot Dog"

Skate.

 

[Skate]

re: Skate's hybrid system results for 17-18. Wow.

Congrats and damn, you've forced me to re-evaluate my preference to hold 8-12 positions in my portfolios. Did you also research this aspect for your system?
Clearly with lots of small positions one big hit isn't going to be noticed and with so many positions you're almost certain to get into most of the best trends of any period.

Now I have to research this myself. More work to do.

Poker & Positionsizing (my simple analogy)

Trading has no rules (true)
I've explained before why trading is Bat-**** scary for beginners & it's so scary because of 'trading rules' or more precisely 'NO Trading Rules'.

I'll explain trading in simple terms, an analogy related to the game of Poker.

The game of Poker
Most understand the game of Poker but for those who don't - Poker is a card game that combines gambling, strategy, and skill & some poker variants involve betting as part of game.

Rules
The game of Poker has lots of rules but consider if there were 'NO rules' in the game of Poker. Imagine if you could have 40 or even 52 cards. Tell the dealer "Just keep them coming" till you have a great hand, a winner hand (a winning Portfolio)

Why use a handbrake
As traders, why do we limit our Portfolio (our hand of cards) to 5, 10, 15 or even 20 positions in our trading portfolio or trading system (I personally use 40 & sometimes 53 positions)

50/50 success rate
My Hybrid strategy has a 50/50 success rate so I need as many positions my funds will allow. The 'DUDS' don't worry about them, I'll trash them quickly so I get another position (another card) The good positions (the good cards) I'll keep the good ones - so I just keep taking positions (cards) that I'm capable of handling (don't pull the handbrake on your trading) I'll keep looking for the good ones till I have a great portfolio of stock (a good hand of Poker)

Why so many positions ?
Simple answer, I trade one Market the (ASX) & in that market I trade one Index, the All Ordinaries (XAO) - trading is a game of mathematics. When you trade the top 500 companies with a positionsize of 50 positions it takes only 10 stock turns to get the good ones.

Bad ones reduce profits
Its a pity sometimes I have to look at the bad ones to decide the good ones, the bad ones cost me money. The bad ones cost only a few dollars to have a peek, so my reasoning, looking at the bad ones is an expense for doing business.

Skate.

 

[Skate]

Skate

I don't have time to answer in full
But will say that over the last 3 yrs my understanding
of mechanical systems and in particular their programming
and testing has altered 180 degrees.

General public access to serious capability isn't collated all in one spot.
Its there but putting it together in a meaningful collation with the
understanding and or direction to use it is sadly unavailable to us.

But very soon it will be!

So, in summary, to reference your post, yes, technical analysis using a mechanical trading system works for me.

But not for all
That is, it works for some traders, like myself & when it does work it works only some of the time, my strike rates is around 50%, so half of the time my strategy is okay but sufficiently to be profitable on balance.

Methodology
Also the successful traders using technical analysis (a mechanical trading system), you can bet the vast majority have developed their own specific methodology and have combined it with rigorous risk management & testing.

Skate.

 

[Skate]

Here's a contradiction I see in APT's business model. One I believe will increase its risks as it tries to de-risk.

Say APT's interest expense goes up. Up due to higher RBA/Fed/Bankers demanding higher rate.

To pass on this risk they could try to raise that merchant/retailer's margin. Can't really increase the late fees too much, can't really start charging interests on members as that would change their business model.

Small retailers are currently being charge up to 6.5%... now, if retailers agree to any higher fees than that it's likely due to retailing being in pretty bad shape. Why would you agree to further discounts right?

When in bad condition, meaning they would have also mark down their merchanise, generally, already.

So retail is in a bad way for retailers to agree to take on more cost through APT.

Retail is slow because the general economy is tough. Tough economic condition increases the likelihood of default. Or late payment.

Since APT's model canned members who's late or defaulted; they cut off their source of revenue. Only opening business to those new, or those more capable of paying.

New increase risk; those who can pay will pay and so won't make APT much money anyway.

Share price will likely rocket up. Over the longer term though, business model is flawed.

I wish to show a chart about (APT) as there is an ongoing discussion about the companies business model
https://www.aussiestockforums.com/threads/apt-afterpay-touch-group.33281/page-16#post-1010808

I have a trading strategy that filters when a stock displays the right trading conditions & as a mechanical system trader its not up to me to decide if the company is good, bad or indifferent. I buy when the Goldilocks conditions are met. (simple)

Disclaimer
APT has been kind to me in the past & has made me a few 'bob' & I'm sure it will again, just sometime in the future.

1st Chart
It's a pretty representation of my previous positions

2nd Chart
Is the actual buying & selling pressure of traders, traders who have money on the line, it's important sometimes to know what other traders are doing, as you can see in (chart 2) there are more buyers than sellers at the moment.

Opinions
We can all have our own opinion about a particular stock but the only opinion that matters to a trader is what market participants are doing (the rest is noise)

Skate.

Chart 1 (my buy & sell positions)



Chart 2 (Buying & Selling pressure, stuff that counts)

 

[Skate]

Ever wondered what would happen if you became quite savvy with your gambling and was a regular winner? Could be a nice little earner where you make a graceful living on your gambling smarts.

Dream on folks.. Do you think the bookies are actually going to let you be a consistent winner ?

How betting agencies restrict punters who win too often or too much
Punters and anti-gambling advocates have hit out at betting agencies for restricting or shutting down the accounts of people who win too often.

Key points:

• Punters detail how operators restrict or shut them down
• Betting agencies labelled "immoral and predatory"
• Calls for universal minimum bet laws

In a little-known strategy to prevent paying out too much to the same winning punters, operators simply restrict how much they can bet or close them down altogether.

There is nothing illegal about it and the right to do it is written into agencies' terms and conditions, but anti-gambling advocates say such conduct is unethical and should be illegal.
https://www.abc.net.au/news/2019-01-20/gambling-how-bookmakers-stop-winning-betters/10708394

basilio, as a registered bookmaker for over 14 years & my brother a professional gambler for the past 47 years I want to say that most commentator sometimes gets some of the story correct but most times they don't understand the industry.

General comment
I not making a comment about your post but I would like to make a few general comments from my perspective.

It's mathematics
As with trading, bookmaking isn't gambling it's a numbers game, it's mathematics '101'

Restrict a gambler (on the whole they aren't lucky)
There is price variations going on all the time & its not to restrict a particular gambler but to balance the ledger. (gamblers are our customers)

The punter
The punter places his bet, backs a runner then hopes/prays/wishers for the best.

The Book
The big punter make a book for you so I'm at a loss why you would want you restrict them, in fact you need them.

The Bookmaker
It's fast, it furious, complicated mental mathematical multiplications then you apply that answer & add back the original stake & write the result on a betting ticket all in the blink of an eye whilst calling out the calculations to a clerk to be penciled in to the ledger. (Adrenalin rush was exciting)

Mental gymnastics
The mental gymnastics correlating the entire book was demanding but it was a required skill to evaluate the risk/reward & how each runner affects the outcome.

Skate.

 

[Skate]

The 'Dump it here' thread lacks posters..

I know it
When I'm posting I'm only repeating what I already know, but when others post, I tend to learn something new.

'ASF' entertains
I've stopped using the Aussie Stock Forum for its educational value, like most I only visit ASF for the entertainment value filling in my time reading posts that add no value to my life even though I enjoy reading them.

Enough said..

Skate.

 

[tech/a]

This poster lacks time

Can’t even keep up with his own threads

 

[Skate]

This poster lacks time

Can’t even keep up with his own threads

Yep, I understand.

Skate.

 

[Skate]

I have a SMSF and running it in retirement phase...meaning I do not pay any income or capital gains taxes. All the portfolio manager's I have looked at all seem to favour the income/capital gains tax accounting layouts, with aged sales throughout the financial years. I do not need any of the complex accounting. Their reports being tax based, seem way off the mark for my needs.
Do you know of a Portfolio Manager(paid or free) that simply:
Records Buys, Sells, Dividends.
Then is "all" I need it do do advise me what my current ownership cost/profit(loss) is per stock taking into account parcel 1,2,3 and 4 all have the same value per share, dividends paid, including Franking Credits. Maybe my current excel spreadsheet is as good as it gets for me?

POR930, my personal recommendation is 'Share Trade Tracker' I've been using the program for many years & it's the best out there (IMHO) & very cost effective, it has all the bells & whistles for your accountant if you have one. (also I've have a hand in its ongoing development)

Support & service is excellent, with automatic updates you are always current with the changing environment. (Free program updates)

There is also a choice of data suppliers (Paid & Free data) & the portfolio tracker is updated with the push of 'one' button. (how cool is that)

https://xlautomation.com.au/excel-spreadsheets/share-trade-tracker

It's worthy of an investigation.

Skate

 

[Gringotts Bank]

Let me make a post about "Market manipulation"
This manipulation goes on more than you think, the uninformed never realises that this practice is highly orchestrated and planned with precision.

Price movement definitely seems planned, down to the tiniest detail. It always strikes me as odd. If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically. I feel like it might.

 

[Skate]

Price movement definitely seems planned, down to the tiniest detail. It always strikes me as odd. If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically. I feel like it might.

Gringotts Bank, If the market (Poker table) consisted of 10 amateurs betting against each other, you said "I wonder if it would still happen".

It would be naive to think otherwise.

Who is the patsy
If you have been in a poker game for a while, and you still don't know who the patsy is, you're the patsy. (its a common saying)

To make money you need to manipulation either the person or the market participants, Trading is not a 'Lilly white' game.

Skate.

 

[Gringotts Bank]

Gringotts Bank, If the market (Poker table) consisted of 10 amateurs betting against each other, you said "I wonder if it would still happen".

It would be naive to think otherwise.

Who is the patsy
If you have been in a poker game for a while, and you still don't know who the patsy is, you're the patsy. (its a common saying)

To make money you need to manipulation either the person or the market participants, Trading is not a 'Lilly white' game.

Skate.

Most (not all, most) of the big players barely manage to beat the index. So if they are the manipulators, why aren't they winning big?

 

[Skate]

Price movement definitely seems planned, down to the tiniest detail. It always strikes me as odd. If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically. I feel like it might.

Most (not all, most) of the big players barely manage to beat the index. So if they are the manipulators, why aren't they winning big?

Nah, Index Fund Managers is not there to make you money, that's not their business model.

More after lunch.

Skate.