Post-trade screenshots

[RobinHood]

I've just spent the past few weeks taking screen-shots of every trade from my main swing trading account. They contain entry and exits, as well as weekly and monthly charts in some cases (to give a context when necessary).

I'm opening it up for all to see. If you would like to give me some constructive criticism or input, it would be super

2005 Longs which were losses
2005 Longs which were profitable
2005 Shorts which were profitable

2006 Longs which were losses
2006 Longs which were profitable
2006 Shorts which were profitable

2007 Longs which were losses
2007 Shorts which were losses
2007 Longs which were profitable
2007 Shorts which were profitable

2008 Longs which were losses
2008 Shorts which were losses
2008 Longs which were profitable
2008 Shorts which were profitable

(To get a bigger chart picture, press "download" when viewing the image)

Notes:
Files are named in the following fashion:
Trade #. Ticker. Time-frame. EE / blank
so 1.ARD.DAILY.EE would mean a trade in ARD on a daily time-frame and the EE means the chart contains the "Entry" and the "Exit".

On the chart the annotation "Entry @o" means entry at opening prices. "Entry @i" means entry at intraday prices (this does not mean my decision was made during market hours - rather, I was filled at an intraday price). The same holds true for exits.

The little blue entry arrows and red exit arrows point to the bar on which the entry/exit took place, not the specific price. On later charts however I began manually pointing to my exact entry on the bar (You will see the difference).

If entry/exit prices are not matching with the chart it is due to a split in the traded issue

11 of the stocks I have traded are no longer actively traded on the exchanges - they are therefore not included.

(this was a blog post, so see my profile if your interested).

 

[Sakk]

Firstly I commend you on posted all your trades for everyone to see and judge.

In order to more closely examine your system we need some more information.
What are your trading rules on the following:

1. Initial Stop Loss Point.
2. Trailing stop to breakeven. Time stops?
3. Trailing exit, or other exit rules.
4. Pyramid rules if any?

Looking at the charts your entries are based on breakouts to new highs and lows and all your trades are consistant with that method.

Based on some of the better winning trades you exited prematurely as the trend continued for some time, however I'm presuming you used exit targets. If using targets possibly exit 50% of position and ride the other 50% with a trailing stop.

Here's my opinion and this only comes from my own personal experience at trading breakouts on a daily chart: note, i no longer trade breakouts
1. you get whipsawed to death IF you set an ISLP and wait for the market to hit your stop.
2. You stops are too close for a breakout method. You need to set wider stops, say 2 - 3 ATR from entry.
3. Only trade a daily breakout system in a strongly trending market and sector for best results!
3. Flip you charts to weekly, using your same rules and I'll bet the system is more profitable, with a much smoother equity curve. Breakout trading works better on weekly data IMHO.

Some ideas you can think about implementing could be:
introduce time stop exits, example reduce position size or exit on x number of bars or if price has not reached x by time period
enter with 50% position size and only pyrammid when the market proves your position correct
wider inital stop 2 - 3 atr maybe

Cheers

 

[tech/a]

Hood.

I have only looked at 2008.
But from these what is clear is 2 things.
(1) More losers in both shorts and longs than winners.
(2) Those loss's appear to be greater in size to winners.

Trade in the direction of the trend (Trade long when the index is generally long---this maybe a sub index---eg in the ASX Energy is the leading index by a mile so if long choose stock in that index).

Cut your losses short ( personally I disagree with widening INITIAL stops---sure do this for position sizing but tighten it up as soon as you have movement in your direction, and if on a winner move your stop to B/E on the first pivot swing low and widen your trailing stop to allow more room to the upside.

In the log run its total losses from total profit.
So 100 small losses and 10 great wins and a few mediocre will see you turn around.

Get yourself a low cost broker like IB if you dont have one particularly in the States where its $1 in and $1 out.

 

[peter2]

It would be good to see the trade stats as tech/a has mentioned.

# trades, W%, Ave win, Ave loss for all the shorts, longs, daily, weekly

Sakk (ex breakout trader) has given you some worthwhile suggestions.

I would add that you look for resistance levels that have been hit or almost hit several times. Trade the breakout of these levels in preference to 60d, 90d breakouts.

Look for clearly defined trading ranges (ledges) in defined trends. You can trade these as continuation patterns and there is a clear place for your protective stop.

You need to define (first) and then look for low risk setups. I like to trade small retracements after a breakout or a move with current momentum. It is these small retracements that provide a low risk setup with obvious entry trigger and protective stop (buy dips in uptrend, sell rallies in down trend).

-----
Ps: I also commend you for seeking suggestions with a post that shows you have put some thought and effort into the business of trading.

 

[MRC & Co]

3. Flip you charts to weekly, using your same rules and I'll bet the system is more profitable, with a much smoother equity curve. Breakout trading works better on weekly data IMHO.

You think? Not that I have backtested it, but from observation, higher frequency, shorter length trades would suit the current choppy market conditions better...........

A weekly would catch larger trends, not sure if that's such a good idea at the moment.......

Good idea though Robin and some good replies!

 

[peter2]

I also find weekly charts easier to trade if you have the capital and the patience.

Diagrams for you to consider, RHood. Don't worry about the current market, you are trying to build a career which will last for decades.

 

[wayneL]

Robin said this was a swing trading account.

The advice above is great advice, but applicable to trend trading, rather than swing trading.

Most of the losing trades I flicked through were much too late for a swing trade... they looked more like trend entries. With swing trading you want to be trading pullbacks, not breakouts.

fwiw

 

[tech/a]

Wayne.

Take your point.

Dont think he is actually swing trading.
Advanced Swing Trading by Crane.
ISBN 0-471-46256-X

Maybe a good publication for Robin.

 

[wayneL]

Another way to look at swing trading, is to drop down your time frame to 30min or 1hour bars and apply trend trading rules. (but still referring to the daily chart for trend direction and pattern)

 

[peter2]

WayneL: Thanks, you are spot on with your last suggestion.

RHood: Swing traders don't take a few of the breakout entries that I saw in your charts. You might like to consider if you are trading the swings or trends. If the confusion is all mine, then sorry.

Swing traders have their own patterns, usually with an indicator for confirmation. I would think an indicator showing divergence would be handy with an overbought/oversold indicator.

A solid understanding of volume with the price spread and close (VSA) would be very helpful to time your entry.

 

[RobinHood]

Most of the losing trades I flicked through were much too late for a swing trade... they looked more like trend entries. With swing trading you want to be trading pullbacks, not breakouts.

Then it is my mistake, it is in fact a trend trading account. I've heard swing trading applied to breakouts as well e.g. Dan Zanger considers himself a "Swing trader" (he buys breakouts).


I trade breakouts also but I apply the idea of "bases" from CANSLIM formula and will sometimes give weighting to fundamentals (rarely though). It is a simplistic discretionary breakout/breakdown - what peter2 showed except I'm late to the entries. Recently, it entered a drawdown I am unable to recover from, which is why I stopped trading it and began to go over everything. As T/A pointed out my losers are bigger than my winners.

Entries:
You may notice many of my early trades were very late (a few bars after the breakout), this is something I picked up on and began trying to improving but it has proved difficult as I'm trading US markets in the Australian timezone. Some school nights I would be up till 4am trading which was just a **** idea in the first place (at least my parents thought so).

I'm considering moving markets (playing around with Gold atm. edit: in-fact just now I missed a good additional pyramid entry ). I don't want ASX stocks as the fees here (brokerage and decent data) are slaughter and I wouldn't be able to achieve anything. The best bet for me right now is to go over everything I've done and learn from it as much as possible and then only work with US stocks when the entries are offered and they are solid (if I'm awake and market environment is conducive to breakouts).


Commission/brokerage:
Meanwhile I am with MB - so paying around $2 per... OK back from organizing my gold trade ...
so $1-3 per round-trip (depending on the stock). I would move to IB but they don't let under 21 use margin.



I'll organize some metrics and post them soon along with my conclusions.

Guys, thanks very much!

 

[wayneL]

Then it is my mistake, it is in fact a trend trading account. I've heard swing trading applied to breakouts as well e.g. Dan Zanger considers himself a "Swing trader" (he buys breakouts).

Yes these definitions can become confusing. A matter of degree I suppose, what degree of "swing" is being traded.

 

[RobinHood]

In order to more closely examine your system we need some more information.
What are your trading rules on the following:

1. Initial Stop Loss Point.
2. Trailing stop to breakeven. Time stops?
3. Trailing exit, or other exit rules.
4. Pyramid rules if any?

1. Arbitrary 5-8%. If there is an appropriate T.A level, I use that.
2. No time stops or trailing stops.
3. Discretionary exit. Climax runs, breakdowns through 50dma my most common.
4. No hard rules. Something I need to organize, but very hard with US timezone.

Based on some of the better winning trades you exited prematurely as the trend continued for some time, however I'm presuming you used exit targets.

No targets. Sometimes I lock in gains on breakdowns.

 

[Sakk]

The best bet for me right now is to go over everything I've done and learn from it as much as possible and then only work with US stocks when the entries are offered and they are solid (if I'm awake and market environment is conducive to breakouts).

Best advice is sometimes within

I'm in Melbourne and I trade US stocks only, end of day. I place a buy stop limit order with an auto stop if done and walk away. If filled great...if not move on to next trade.

You don't need to trade on intra day data to be consistently profitable. You can be successful in this game in any timeframe...pick one that suits your psychology and lifestyle and be the best you can be at it.

Ahhh I only wish I got into trading when I was your age.

 

[It's Snake Pliskin]

Wayne.

Take your point.

Dont think he is actually swing trading.
Advanced Swing Trading by Crane.
ISBN 0-471-46256-X

Maybe a good publication for Robin.

Have you read this publication Tech?

Have you used pitchforks and Gann fans before?

 

[tech/a]

Yes.

I have studied application of both and many more Analysis tools.
I'm yet to find a consistent application for most.

I have to say that like most of this style of analysis it looks fantastic in hindsite.
Application going forward is simply hopeless.
I'm yet to find a practitioner of these sorts of styles who can consistently post up charts with application of analysis which show a consistent profit over time in REALTIME.

 

[RobinHood]

Conclusion from post-trade analysis:
Having gone over all my trades on daily, weekly and sometimes even monthly time-frames I have to say there was no real “ahhuh” moment. This is probably because I make it a habit to go over my trades every few months, but this is the first time I’ve done it with printed charts.

I wrote down the following observations (many of which are already ‘common wisdom’):
• All my winners had almost immediately gone in my direction – perhaps good reason to develop a system of scaling down when the position goes against you.

• Broad market (indices) corrections would lead to the stocks breaking down or consolidation. Consolidating in a tight range in the best case.

• My entries were too late on both my shorts and longs. Especially on my shorts. This is easy to change (I already have), but it means I will not be able to take as many longs due to time zone differences. Late entries make you very vulnerable to pullbacks.

• I noticed many of my failed trades were bought after a large weekly run (200 %+) with very little consolidation, i.e. weekly rather than monthly. If they did continue to run this was usually a trick breakout which would lead to the development of another “base” / consolidation pattern.

• Relating to the above point: I think that smaller consolidations are only really acceptable if you have a very strong industry which is also showing rampant speculation (e.g. oil related stocks like PDO).

• In speculative issues (low price, low volume types) sometimes my long entries were the actual tops. Perhaps a trap for momentum players?

• Big consolidation periods (often the double-bottom type), many months / a year were rarely followed by a strong uptrend – but usually just more chop.

• I found lots of new stocks after a run of say 30%+ would actually form two bases. One which would fakeout and then the price action would create a similar one again which was the actual breakout.

• Look for a history of long-term downtrend as these stocks are usually bad performers over the monthly /long-term period

• Buying on a “right-side of a base” rather than an actual breakout hardly worked. I would usually get caught out on a pullback and only succeed on the breakout.

• Those volatile charts showing shakeouts and fakeouts in every direction never performed as well as those textbook type charts with smooth price-action combined with volume – my big winners were never these crazy cowboy charts.

• You shouldn’t rush to get into IPO’s. They are tricky because they lack a history and often shake you out (me). See : (2007 long losers MELI #21) and also (2008 long losers TITN #3)

• It may be worth trying to use partial exits (scaling out) on smaller chart-pattern breakdowns early on (i.e. Near the buy point)

• Short setups need to be worked on. My entries are not defined as well as they are in longs. They also only work for me on a shorter-time frame and are therefore much harder to pull-off / make money from safely.

• Unless I can find a good R:R entry there is really no point putting in an arbitrary stop which was actually designed for a totally different type of entry. Go with the T.A based stops offering a good R:R, go 1% risk instead of 2% if you insist on buying speculative issues. CANSLIM (containing particular fundamental characteristics as defined by William O’Neil. See www.investors.com) stocks are the exception. Stops can be widened for these.

• Finally. Its the market that has changed (I already knew that), not so much my system. If anything my system should have improved. The problem is me. I need to be able to better determine market conditions such as chop, downtrend and therefore know when to get defensive and when to get aggressive. This is not really something I can learn from textbooks, but they can help.

All the above relates to MY trades. Therefore it could be wrong as it is only based on a small data-sample relative to the market itself.

Other conclusions:
I need to buy some top-notch trade log software to track a vast amount of details (time of trade, high during trade, comments, chart, volatility, market environment, allows me to jot down some fundamentals and other risk measurements etc). Probably Stator AFM (thanks T/A).

I’m going to pickup Ninja-trader (not related to my “swing trading”/ trend trading) but this will help my short-term futures trading with access to a nicer DOM and trade analytics /metrics and especially system testing / idea testing.

If I’m going to swing trade well I need better data. Industry groups / news / fundamental screening (only relates to CANSLIM stocks). But this also applies to my other shorter-term trading (this is for another time).



Now, the metrics (very basic)…
CLICK HERE FOR BASIC METRICS + EQUITY CURVE

Note: drawdown is inaccurate. It was worse because the software did not measure the highs during the trades.

 

[It's Snake Pliskin]

Yes.

I have studied application of both and many more Analysis tools.
I'm yet to find a consistent application for most.

I have to say that like most of this style of analysis it looks fantastic in hindsite.
Application going forward is simply hopeless.
I'm yet to find a practitioner of these sorts of styles who can consistently post up charts with application of analysis which show a consistent profit over time in REALTIME.

Thanks.
I am not interested in reading that book, a quick flick through it at Amazon revealed its contents, not for me. However, I was interested in your opinion as it has mixed reviews.