My 99 trades

[skc]

Skc, while it's useful to go back and anaylse your work, don't put too much significance on 99 trades. A bit of extreme shorterm variance either way and your stats would change significantly.

I understand. A single 5R trade would have turned the whole equation.

It was a pretty good exercise in the end to pinpoint where the issues are. Again like I said..

Profit = winners - losers - cost.

The area for improvement is in winners and to a lessor extent, cost (on a relative basis).

 

[beamstas]

I understand. A single 5R trade would have turned the whole equation.

It was a pretty good exercise in the end to pinpoint where the issues are. Again like I said..

Profit = winners - losers - cost.

The area for improvement is in winners and to a lessor extent, cost (on a relative basis).

I like this
Losers should all be similar, 1R, or less (for example after a pattern failure you might tighten the stop to .5R)

This leaves the only real variables as how much you win and how much it costs to trade.
If you have enough capital then cost to trade is also not a variable.

 

[Mr J]

I suppose what I mean to say is that it's useful to analyse your methods and philosophy rather than focus on results. The results may identify weaknesses in your methodology, but any tweaks should be made to the methodology rather than the results.

I played online poker seriously for over a year, and asking for feedback was extremely common. Some people would post stats over a particular sample, but unless there was something quite off, the sample was meaningless. A far better way to judge play was to post commentary on hand histories. I believe the same would be true for traders, although traders seem to be more secretive over their methods than poker players.

 

[So_Cynical]

To me it is quite clear that I need bigger winners, with a avg win / avg loss ratio of only 1.36. The area for improvement does not seem to lie in holding onto the losers. Like to hear your reaction though...

Thanks for posting those results...i really though the outcome would be alot more positive than it turned out to be...ive noticed u and i look at alot of the same stocks so just figured the results would be similar.

 

[johnnyg]

Only pretty new to putting results into charts and I haven't quite worked out how to get an Equity Curve plotted as of yet, but here is my 20 trades to date (only paper trading still).

As noted on the chart 3 of my losses (1R or $200) are all very similar. I was trying to pick the top of 3 different stocks against a strong trend. Yes they may of showed signs that prices may react however I was way to aggressive in my approach. The 3 of those trades are also my only shorts in the 20 trades.

Plenty more to learn.

 

[johnnyg]

Hope I'm not getting off track in your thread skc, but I thought while I'm at it I'd put up 2 other charts, First is my CFD trading from 6-8 months ago when I thought it was all to easy and wasn't using any Risk Management. Ended up blowing up a $700 account.

2nd is my first list of trades, and what I'd more so call Investing with dabbling in Day trading, where I'd head over to Hotc0pper and look for the latest tip.

Hopefully there is some improvement from these 2 compared to my first Chart.

 

[johnnyg]

Cant edit my original post.

 

[skc]

Johnnyg, thanks for sharing. It's a bit hard to judge based on so few trades, but congrats on putting in some risk control, and good luck with further trading.

 

[johnnyg]

Cheers skc, I must of missed this post before.

I have been a little lazy organizing setups, that's a reasonable problem of mine so Ive been trying hard to improve and focus more. Ill re-assess after 50 trades.

How have you been going lately?

 

[johnnyg]

Here's another set of results from a mechanical trading system I'm toying around with.

Dates - 12/5/09 - 5/6/09 (all closed on the 5th)
Starting Capital - $20000
Ending Capital - $32566
Risk per Trade - $200
# of trades - 110

Need to start logging trades again and see how it performs for another 4 weeks.

 

[sleepy]

johnnyg

Nice set of numbers (ie., R-multiples)

.. are they actual trades taken or this a hypothetical system/account?
... and have you included commission costs (assuming $10 per ASX CFD trade youd be looking at 110 * 20 = $2200 minimum)


sleepy

 

[johnnyg]

Just paper trading at the moment sleepy. It definitely needs more work and refinement as the 20% draw down at the start wouldn't be the easiest to trade I don't think.

I didn't take into account commissions so you could take off that amount from the end result.

 

[johnnyg]

Hello again skc, approaching 50 trades myself and will start up a new thread once I reach that # for comments and improvement.

Just curious on your approach you took with your review, and steps you put in place after it, and whether they were beneficial or not?

For mine my biggest thing is to work out a good trailing stop, one that works well most of the time, I perhaps might even look at having 2 different stop methods, depending on the type of pattern I'm trading and how long it took for form ect so that once I enter the trade I know exactly what i want to do.

I might even look into separating each pattern that I traded in groups to see if some work better then others, others might have a lower expectancy therefore only trade 1/2 parcels until the analysis is confirmed ect.

I want to be careful though not to curve fit results as the markets had a pretty good run in the last 6 months.

 

[skc]

Hello again skc, approaching 50 trades myself and will start up a new thread once I reach that # for comments and improvement.

Just curious on your approach you took with your review, and steps you put in place after it, and whether they were beneficial or not?

For mine my biggest thing is to work out a good trailing stop, one that works well most of the time, I perhaps might even look at having 2 different stop methods, depending on the type of pattern I'm trading and how long it took for form ect so that once I enter the trade I know exactly what i want to do.

I might even look into separating each pattern that I traded in groups to see if some work better then others, others might have a lower expectancy therefore only trade 1/2 parcels until the analysis is confirmed ect.

I want to be careful though not to curve fit results as the markets had a pretty good run in the last 6 months.

It's been better, but I don't think I've nailed the stop plcement yet either. In fact, my stops are probably placed at the worse place for this market on hindsight. Not tight enough to lock all the profits, but also not wide enough to handle the inevitable retracement within the wider bull run.

I will provide some stats once I close another 99 trades (currently at 86).

 

[sammy84]

It's been better, but I don't think I've nailed the stop plcement yet either. In fact, my stops are probably placed at the worse place for this market on hindsight. Not tight enough to lock all the profits, but also not wide enough to handle the inevitable retracement within the wider bull run.

I will provide some stats once I close another 99 trades (currently at 86).

Seems a bit contradictory :

 

[Mr J]

It's been better, but I don't think I've nailed the stop plcement yet either. In fact, my stops are probably placed at the worse place for this market on hindsight. Not tight enough to lock all the profits, but also not wide enough to handle the inevitable retracement within the wider bull run.

I will provide some stats once I close another 99 trades (currently at 86).

Maybe it's a question of strategy rather than just stop placement? Stops should allow you to meet your ballpark target if the trade goes well. Do you find you're getting cut short too early, or are aiming for smaller profits but keeping stops loose to try and luck onto larger moves?

 

[joslad]

Good thread skc - I've only just noticed it today.

Takes a bit of courage to put up your results knowing that some of the knockers will rip into your results - but never posting up their own results to be critique'd.

I thought your results posted in June were good and probably above average, especially as you are new to trading.

Most of the profit comes from a small number of large winning trades and most of the losses from a small number of bad losing trades. The majority of trades are small gainers and losers that tend to cancel each other out. That is certainly the case with my results.

Be interested to see how things have been going over the past few months when you hit 99 trades...

 

[johnnyg]

Cheers skc, will be interesting to see.

Regards John.

 

[conankun]

Hey skc,

Quick question, how do you get the equity and P/L chart? Did you manually enter your daily end-of-day position($) in Ms Excel to create the graph or did it come from your broker or you have certain software to do it?

Planning to create one for myself when I got the time

 

[skc]

Seems a bit contradictory :

Maybe it's a question of strategy rather than just stop placement? Stops should allow you to meet your ballpark target if the trade goes well. Do you find you're getting cut short too early, or are aiming for smaller profits but keeping stops loose to try and luck onto larger moves?

Precisely. It's contradictory and therefore a strategy issue. Say entry is $1 and the share goes from $1 up to $1.3, back down $1.1 and then back up to $1.5. There are 2 ways to capture the movement.

1. Tight trailing stops, say 5c for argument sake. So entry at $1, stopped out at $1.25 (25c).

2. Wider stop that trails slower, say move stop to $1.1 only after that pivot low has formed. But it means foregoing the 25c profit one could have had. The paper profit is now 50c, but the locked in profit is still only 10c.

On the other hand, a stop somewhere in between, say a 15c trailing stop would result in just 15c profit, and that is what I meant by it being not tight enough or wide enough.

On hindsight there were 2 good reasons why I trail a semi-tight stop up quite quickly.

1. Moving the stop up allowed me to reduce my total value at risk. This in turn allowed me to open new positions (subjected to capital constrain which I've yet to experience) and ccapture other opportunities in the current market environment.

2. I am a bear on the fundamentals and can't help but be influenced by my belief that this rally is not the new bull market and may reverse sharply any day. While I am not picking the top by shorting, my concerns held me back from being relaxed about minor retracements.