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PositiveDev's trading journey


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Is that your running PD?

Do you go so far?

 

I used to run and cycle regularly, but the knees are "shot" now,

so it does not come so easy any more

 

Yeah, I do quite a bit of running these days, keeps me pretty fit and sharp (at least I like to think so). I must admit I do think about what regular long distance does for the knees over a few years, a friend of mine recommended Sorbothane insoles a few years back. I've been using them ever since, very good shock absorbing properties.

 

SorbothaneSorbo-pro_insoles_Box.jpg

 

 

From the Sorbothane website;

 

" Sorbothane® is a highly damped, visco-elastic polymeric solid that flows like a liquid under load. Since its introduction in 1982, Sorbothane® has been used in many energy absorbing product applications. Our engineers partnered with NASA to design a unique Sorbothane® isolator that protects the vital shuttle cameras during launch. Curators from the National Park Service and the Philadelphia Museum of Art placed their complete trust and confidence in a specially designed Sorbothane®isolation system that protected the historic Liberty Bell, from further damage, as it was successfully transported 935 feet to its new home. "

 

They're very effective, they make a real difference, I use them in all my shoes now, not just my running shoes.

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Yeah, I do quite a bit of running these days, keeps me pretty fit and sharp (at least I like to think so). I must admit I do think about what regular long distance does for the knees over a few years, a friend of mine recommended Sorbothane insoles a few years back. I've been using them ever since, very good shock absorbing properties.

 

SorbothaneSorbo-pro_insoles_Box.jpg

. . .

They're very effective, they make a real difference, I use them in all my shoes now, not just my running shoes.

I used to do some good thinking on one hour jobs - They were a sort of meditation for me.

 

But I have now dislocated something in my left knee, and I think it will just get worse if I take a long jog.

So I now limit myself to 15-20 minutes and miss those longer run part-meditations

 

Here is what I get up to at the end of June each year:

http://www.facebook.com/photo.php?v=3730537780753

Hmm.

That "rolling" might be less dangerous for those of us with bad knees

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Swimming another answer. Pools a bit boring, lakes or sea even better and you never quite know what you might bump into ;)

 

I used to do quite a bit of swimming but yes it isn't that exciting, although I used to jazz it up a bit by taking one breath (one inhale), and holding it for one length, then just doing one breath per length swum. I only did one length at a time though, you need the recovery time after each length. Great excercise to build lung capacity.

 

I found out about "The Marathon de Sables" recently, maybe Van would be interested in this? biggrin.gif

 

 

 

MDS.png

from http://www.saharamarathon.co.uk/about.html

 

I considered entering for this for.......oh, about a nanosecond I think it was....

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Sell signal at 09:27, filled at 2553.75.

 

E-Mini NASDAQ futures

12thJuly.png

 

Market sold off down to 2543.75, hitting my profit order for a 10 point gain. Seemed like a decent trade, until you see what happened next...;

 

 

E-Mini NASDAQ futures

12thJulymilage.png

 

A deeper sell off, apparently caused by "overriding worries about global economic growth " (that's according to marketwatch.com). A further 26.25 points at it's lowest point for the day.

 

Once I've traded my new strategy for a while, and become accustomed to the performance and the results I can reasonably expect, I can look to start trying different ideas out for scaling out of positions.

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Did you manage to get long the US market yesterday?

 

I sold my TZA calls, that expire next week

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Buy signal at 12:46, filled at 2548, stopped out for a 2 point loss;

 

13thJuly.png

 

 

 

I'm relatively pleased with the way this new strategy trades, it's more consistent than the previous one, in fact looking back at the stats for the previous one they are not very good at all (although I still managed to make a modest profit from it).

The following is a chart of the model equity curve (points per contract) since the start of May. This chart represents the points gain per contract had I been able to trade each and every one of the signals that Strategy II provides (and I am not able to do this as I have a regular (intensely dull) job that pays the bills and boy does it get in the way of this!).

 

ExecuteORDie.png

 

It's important to stress this is not what I have achieved with the new strategy (my actual results chart is more modest as it's difficult to trade all the signals due to my "9-5" (pre)occupation ). As a result of this chart in comparison to the actual more modest results I've achieved, at the start of the week I declared my new motto as "Execute or Die". My strategy has thus far displayed great positive expectation so the more I trade it, the more I'll gain from it. This sometimes means trading using my mobile and initiating trades whilst on a train, sitting at my desk or even more unusual places where trading is not typically on one's mind (or ought not to be)...

 

I managed to execute all but 2 of the signals this week, not bad considering I was "pre-occupied". Next week I can trade from my home desk all week, thankfully.

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Short at 11:49, filled at 2572.50. Following this US Retail Sales (MoM) June came in at -0.5% against expectations of 0.2% with Retail Sales ex autos coming in at 0.4% against expectations of 0.0%, therefore I expected this trade to be a winner however the dollar sold off rapidly, keeping the NASDAQ stable, before the NASDAQ rallied up taking out my stop for a 2 point loss. Following this the expected sell off came, down to 2561.25.

 

 

Dollar Index Futures

DIndex.png

 

 

 

Further signal at 15:14, a long filled at 2564.50. Market rallied up to 2574.50 hitting my limit order for a 10 point gain.

E-Mini NASDAQ futures

16thJuly.png

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GLD-SPY, over a slightly longer timeframe;

GLD-SPYlongterm.png

 

Quite a marked jump from the tail end of 2007 until the end of 2008. Whereas now it does suggest we are past the creation of a low. Next stop $2000?

Hey, PD: Do you think you can update the above chart?

 

GLD could go sideways for another month, I suppose

 

bigx.gif

 

But if/when I breaks up, the move could be fast and furious

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I've shifted the trendline lower as it's come down slightly over the last few days;

 

GLD-SPY (Weekly)

GLD-SPYupdate.png

 

 

GLD-SPY (Daily)

GLD-SPYDailychart.png

 

Maybe something clearer will emerge over the next few days.

 

 

 

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 

 

There were no signals for me to trade today.

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THANKS

That looks good, but not conclusive - could still pull back to the support area

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Short at 08:24, filled at 2581.50. Market went sideways before taking out my stop for a 2 point loss.

 

Second trade was a long at 13:58, market went sideways into the open...;

E-Mini NASDAQ

18thJuly.png

 

...then down to 2576.75 taking out my stop for a 2 point loss. The market then rallied 35 points higher (so far). I was stopped out from a great trade for the sake of 0.5 of a point.

 

That's unfortunate, but comes with the territory when trading futures. Perhaps it might have been more wise to place my stop just below the low that occurred before I entered the trade...

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Three shorts today, the first 2 at 08:21 (filled at 2653.25), and at 08:48 (filled at 2655.50). Both stopped out for a 2 point loss. The next was at 10:14 (filled at 2656.50), the market sold off down to 2646.50 taking out my limit order for a 10 point gain.

 

E-Mini NASDAQ;

20thJuly.png

 

 

That last short turned out to be right at the top, with the market continuing to sell off to as low as 2618 at one point (so far).

 

 

I had thought there was a higher probability of a down day earlier due to some divergences between equity and currency markets;

Currencyconvergence.png

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One short at 13:08, filled at 2576.75;

 

24thJuly.png

 

Stopped out in fairly short order for a 2.5 point loss, got skinned half a point of slippage on the exit. The Richmond Fed Manufacturing Index for July came in at -17 against expectations of 0.

 

A big drop to a low not seen since 23rd September 2008, 8 days after the collapse of Lehman brothers...;

 

Richmond Fed Manufacturing Index

RichmondFed.png

 

Doesn't bode well, this should sharpen the market's acuity and focus on upcoming data in the coming days/weeks.

 

 

What is interesting is how markets seem to "pull together" sometimes at turns, almost as if the correlations between the markets peak out closer to 1 then fall off following the turn...;

Currencyconvergence-1.png

 

The turn here is 2 mins after the open.

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Buy signal at 10:12, got long at 2574.75;

 

 

E-Mini NASDAQ futures

27thJuly1.png

 

The market spiked down to 2572.50, taking out my stop for a 2 point loss. Later on in the day it transpired that the low of the day was in fact 2572.50, just 0.25 below where my stop was so I was perhaps slightly unfortunate to have been removed from that particular opportunity.

 

 

Later, at 13:03, there was another buy signal, went long at 2581.50;

E-Mini NASDAQ futures

27thJuly2.png

 

I got in at the correct level this time, almost the exact low of that small down phase. The market rallied up to 2593 taking out my profit limit order for a gain of 10 points.

 

 

The back drop here was that the US Q2 GDP number was out at 13:30, and it came in at 1.5% against expectations of 1.4%. Later on there was further positive news from Merkel and Hollande (Zerohedge excerpt);

"Well it had to come, hope was fading. Special delivery via telephone from her vacation (via Bloomberg)...

 

    • *MERKEL, HOLLANDE READY TO DO ANYTHING TO PROTECT EURO REGION
    • *MERKEL, HOLLANDE: EU INSTITUTIONS, STATES MUST MEET COMMITMENTS
    • *PASOK'S VENIZELOS UNDERLINED NEED TO EXTEND PROGRAM TO TROIKA

Translation (for non-European-speakers): Europe promises to talk much more. Also promises to not actually do anything as long as it takes.

 

    • Germany, France: must implement June summit conclusions quickly. Market ramps on hope that the event that ramped it in June, is implemented

In summary, the Eurozone is committed to preserving itself. Truly breaking news which will trigger all EURUSD stop losses"

 

 

 

Altogether the market soared higher, here's what happened after I closed out that trade;

E-Mini NASDAQ futures

27thJuly3.png

 

The market is up an additional 50 points from where I closed out that long. This is another sign on my journey here that I need to be scaling out of positions, in order to make more of these occasions; larger trends or trend days like today where the market just keeps going one way.

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Couple of longs today, initially at 07:51, filled at 2643.25, and a further one at 13:41, filled at 2643.25;

 

31stJuly.png

 

Each stopped out for a 2 point loss. There was some positive news today, with Case/Schiller home prices coming in at -0.7% against expectations of -1.5%, Chicago Purchasing Manager's Index coming in at 53.7 against expectations of 52.5 and Consumer confidence came in at 65.9 against expectations of 61.8.

 

The market is flat to down, possibly due to the FED rate decision and policy statement tomorrow.

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Three trades yesterday, three longs, at 14:53 (filled at 2643.50), at 16:45 (filled at 2636.75) and 16:58 (filled at 2635.75).

1stAugust.png

 

The first 2 stopped out for a 2 point loss, the third was stopped out at breakeven. I should probably make a point of not trading on FOMC interest rate days.

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How's the trading going overall? Is it worth the stress and hard work involved?

 

 

It's going ok, it's difficult to properly take advantage of my edge since I have a full time job that I trade around. My edge for this current strategy is that, on average, 31% of the signals are winners, and I am using a 1 : 5 risk reward ratio. So each trade I risk 2 points and I have a fixed profit limit order at 10 points.

 

So for example, taking into account commissions I would need to achieve a win rate of just 21%, to break even. So my edge for this strategy is that the average win % for trades is 10% higher than the breakeven % required.

 

Since I can't trade all the time, this means that as well as potentially missing some losing trades, I miss some winning trades also, of course missing winning trades has an adverse impact on profitability, particularly since the difference between the risk and the reward is on the high side. So although I've designed a pretty good and consistent strategy it only works optimally if I can trade it consistently ensuring all the signals are traded. For the last 2 months I've been going through a process of trading and assessing this latest strategy. I'll need to look at the numbers more closely to see if I would be better off with a different approach.

 

Trading was stressful a long time ago when I started trading options, mainly because I was determined to just trade and learn as I go along rather than paper trade or trade on a demo account, I didn't have any sort of plan nor any clue as to what I was doing, and I later discovered I am more suited to trading futures. The stressful thing about trading is if your PC crashes while you're in a trade (it's happened a couple of times before), although it just means a call to the broker if I need to cancel orders or get out of a trade. As regards hard work I don't classify it as work. I read a book a while ago;

 

jewish-wisdom-for-business-success.jpg

 

 

 

I got a lot out of this book, one of the interesting messages was that if you are following your authentic will in the pursuit of a goal then it will not feel like work and time will pass quickly.

 

From Chapter 2 - NOTHING STANDS BEFORE THE WILL

 

"Another way to identify your authentic self is to recognize when you become completely engrossed in something. If you are able to jump into a subject or action to the degree that you lose all sense of time and feel a deep sense of fulfillment, you know that that subject or action aligns with your authentic self "

 

This is what trading feels like for me. This is a great chapter to read for anyone who isn't currently doing what they want to in their work life.

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