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October Stock Tipping Comp Tech's short term trading portfolio/test case

tech/a

No Ordinary Duck
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I've noticed that there are some real performers picked by those here.
Thought that this would be as good as any to pick short term trades.

As funds wouldnt allow trading all of these at once I have chosen those which I believe have the best potential to out perform (No offence to anyone I certaintly wont be 100% right and will be interesting to see if a chart scan will gleen more winners than the main comp).
I have allocated $5000 to each trade with stops mainly at 10% of purchase price---some of the low priced volitile stocks are at more.The comp doesnt have this facility.
I will also use a variable 3 day EMA technical exit---a close below means an exit.
See chart attached.

As part of the short term trading system thread thought this could have a chance of success.First thing is attempt to out perform the whole comp.

I can show progress each day after downloads each night.
Thought it would be interesting.
Would need $60000 to trade.
See attached portfolio.
Portfolio software is Stator.
 

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Meant to mention the stocks are from the October Tipping Comp the only one of mine is WEB which is my selection in the comp.All the other tips are from those in the comp.
 
Will be an interesting thread and I intend to follow it closely.

How did you vet the list of tips?
 
Doc.

It was simply eyeballing the charts.
PMA above is an example.I was looking for clear indication that the stock was on the move.My thinking is that being short term trading I want there to be action immediately.
There is certaintly risk with trading short term.O ne area I will be investigating is the effect of INITIAL STOP placement.I've purposely set wider than usual stops as I've not analysed the total performance.
I'm of the opinion that a 10% from initial buy price stop is OK for stocks over 50c but 20% would be required for stoks below.
This is one question I wish to answer.
Over time I'm hoping we will be able to tweek trading rules to improve performance.
I also intend to continue running each months portfolio beyond the end of the month to determine.
(1) Whether closing the portfolio at the end of the month regardless of Stock performance
OR
(2) Continuing the portfolio until ALL trades have either been stopped or exited at which then that months portfolio is extinct---If this proves the best thing to do in real life finding $60k a month or so would be a challenge!!!
OR
(3) A combination of (1) and (2) where stocks that go cold are closed by the introduction of a trailing stop---even though the exit chosen for the method is pretty tight.

Anyway all questions I would like answered and though it would be interesting to publish the search.the results and any discussion.

Are there any questions that others would like to discover in this exercise?
 
Tech/a - I'm happy to see my tip made it into your test portfolio (WME)
They are a very bright little number who have been trending nicely lately. The volume is too low for my usual liking, but I believe there is good to come out of them after making a placement that happened about 6 weeks ago and finding none of the new stock flooded back to market. Tightly held and awaiting news. ;)
Love your portfolio-
I think it's a brilliant idea, and suggested we monitor it a few months ago to see the overall result of taking up the tips, but didn't make the effort myself - so thanks tech and I too will be watching with great interest.
Also for fun it would be good to see how 'the rest of the field' performs - which is roughly the same number of stocks again - or maybe a slightly larger field actually as we had a few last minute entries.
 
Ive further weeded out the "A" list in my veiw so if funds didnt allow $50,000
These are the must have.I'll set them as well as those not making the Cut in a portfolio so performance can be guaged at a glance.

"A" LIST

WEB (I'm biased but think this will be at the bottom of the others).
BLR
TOX (Biased here to)
PNN (Dark horse).
PDN
GGY (This I really like)

Liquidity was a large factor in determination as was chart performance.
 
Yes it maybe that Myself and Epsilon are the only 2 on the planet that do like it.

I get it wrong more often than get it right.
The bottomline--Reward to risk--is whats important not individual performances.
GGY is currently over stretched after Fridays surge.
An inside day would be expected here the higher it finishes towards Fridays close the stronger the buying was Friday.Under 7.5c would be below average.
 
WEB, another good company, with record profits although the Bali Bombings will effect the share price this month.
 
Hi Tech,

Will be interested in the outcome of this exercise.
Also, I have a couple of questions.

You said that this is for short term trading, what do you class as short term?
To me, short term means that as long as the share is trending strongly, and has not broken my stop, then I am still in, be it 1, 3, or even 6 months.

You also said that you would be using a 3 day EMA as your stop. What is your reason for such a tight stop. In a strong trending share, I would have thought a 9, or even a 12 day EMA would be more beneficial. As we all know, when a share is tending strongly it will nearly always have a 2-3 day pullback, breaking the 3 day EMA, before taking off strongly again.
 
mikeg said:
Hi Tech,


You said that this is for short term trading, what do you class as short term?

To some people anything under 6 - 12 months might be deemed short term even 2 years to others. I have made many trades some being for periods of hours only, others have gone 3 to 4 days. Not sure what Tech is actually out to do here but he called a short term trading system, be really interesting to see how that 3 day ema goes across these stocks, but will he go back for more if he exits and take profit at various stages in an uptrending stock, only Tech can answer that, certainly I do.
 
Mikeg

As the comp runs only for a month then I guess thats the length I'm talking.
Having said that though I certaintly agree with you and have already mentioned that I'll probably run each month until it comes to its natural end.

EXIT.

Its not a 3 day EMA its a Variable 3 Day EMA which is a custom formula that I'm playing with.
It works completely different to an M/A cross over as the trigger is a binary code which detects down turns from the constant variable and expresses it as either true (1) or False (0).
The idea of the Variable M/A is to follow the trend and Ive shown on this chart the difference in the way the 2 Indicators plot and the signal of each.

The Selections today almost paid for total brokerage for the 12 trades both in and out.
I'm doing this for fun and by no means offering up a short term system.
I personally feel I can get it to turn a good profit but thought I'd post things as they develope here.
Others may wish to use other selections other stops and other exits.
This is just one.
 

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The short "A" list is actually nett profitable including paying for broker fees.
 
tech/a said:
Yes it maybe that Myself and Epsilon are the only 2 on the planet that do like it.

I get it wrong more often than get it right.
The bottomline--Reward to risk--is whats important not individual performances.
GGY is currently over stretched after Fridays surge.
An inside day would be expected here the higher it finishes towards Fridays close the stronger the buying was Friday.Under 7.5c would be below average.

Tech/a

"I get it wrong more often than get it right" (above)

Can you clarify this statement? Does it refer to just this thread, or does it refer to your overall trading of your portfolio?

Not looking for exact results here, of course, but just the general idea.

I guess what I'm really interested in - and perhaps this should be a new thread - is how often technical devotees succeed, compared with those of us who at least thus far, rely on the fundamental approach?

Could we take, e.g. a base of 20 stocks (or perhaps not everyone has that many intheir portfolio?) and comment on how many after,say, six months, are worth more than you paid (include by how much if you like), and how many are about the same and how many have shown a loss of 10% or more.

I'm not suggesting this exercise in order to know anything about what stocks or what value anyone has. It's just that I'm currently in that question mark area of wondering whether TA or FA produces the best results, or more likely, is it a combination of both?

Someone may be able to suggest a more logical way to approach what I'm thinking about. Above is just a sketchy idea only.

Would really appreciate your thoughts.

Julia
 
Brer

No problems I'm happy to put it here now if there are others who wish to tweek it--perhaps we can devise a new indicator.--I've also done it with ATR.

Julia.
I learnt around 6 yrs ago that the vast majority of people involved in Business (The right product,the cheapest price,etc),Property (Position,timing),and particularly Trading are of the opinion that each and every decision needs to be right when in fact there is only one thing you must guarentee and thats that your dealings are profitable..
Lets take trading.
Most get hitched up on the analysis---the all important selection of a trade.
We have Fundamental,technical and a combination of both.
I think youre aware that I've been involved in the development and implementation of trading systems for many years. From that research I can tell you that youll be more correct in the short term than the long, although you tend to become more correct again over the very long term.

Short term traders--very good ones will get it right around 45-60% of the time.
Their profit / trade will be as low as 1.2:1 but would ideally aim at 2.5-3:1.
Longer term Traders will get it right (Over their timeframe)30-40% of the time but will return a reward to risk of over 5:1 I myself systems trade at 12:1.
My systems trading % winners is around 45-50%,testing told me it would be around 32%but I do Eyeball charts which wasnt built into the systems testing.

I have been discretionary trading a bit of late and I seem to be at around 40-50% with these with a R/R ratio of around 2.8:1

ITS ABOUT THE NUMBERS

Once you understand that then you can work on MAXIMISING those numbers.
(By you I mean anyone trading/investing in shares).

Thats what this exercise is all about---we have noticed some good results in past months and this exercise is an attempt to maximise those numbers and see if they are worth trading.To trade them on selection alone would not be very profitable---hence the introduction of other factors which WHEN APPLIED--will result in a set of numbers--its not the factors alone---but the combination which will result in various ratios of win/loss and return---these should be the Traders/investors tools of trade--how you get YOUR numbers (The tools you use) wont in itself determine your success.

Julia in your own case its a matter of maximising your numbers---but thats a few weeks down the track--(In reference to our private mails).

I'm hoping that this all becomes clearer as the exercise matures.
 
Custom indicators are becoming a favorite of mine too! Great minds do think alike huh! :D I probably just gleaned the concept off one of the great minds here at ASF anyways.

Im more than happy to have a stab at it. I dont know squat about this binary code business though. Sounds like a job for the all conquering Greatpig! After that automatic trendline thingy I reckon you can manage anything GP.
 
PNN would be exited on stop at 54.5c This is a technical stop and below the 10% stop set as a fixed initial stop.
For this exercise it will now show on the 2 portfolio's running as sold---stopped out.

GGY is close to its exit of .067 being 20% of initial buy.
A lowr high and lower low have been made on the daily tick charts which is not a good shorterms sign.
However it is coming to rest in some old support areas (.07c ) and may hold.
 
I actually sold my WEB holding today.
Bali has caused a short term sell off in my view with a possibility of better buying this month.
Stop for these portfolio's is 42c so I'll leave that in place.


QUESTION
If I was trading this as my porfolio I would be looking at my universe of stocks to buy new prospects if one was stopped or exited.
I'm thinking that if this is to be a reflection of a true traded portfolio in which we trade those stocks selected in the comp (our stock selection universe),then each time the opportunity arises I should take another trade---either pyramiding one already open----or a new selection---or buy back into a trade previously closed.
After all this is a test case in attempting to maximising the return on the competition selections.

Your thoughts?
 
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