Jeepers. The Nikkei is up 465 points / 2.19%. DAX: +150 / 1.21%.
By the way @Spudfan.
I’m sure you’re still away but maybe check in from time to time.
As I sit here patiently waiting (and waiting) (and waiting) for trades to present themselves I’ve been looking at how the last short trades could have been improved upon (no matter that those two were oversized it i.e. they closed at losses no matter what). And I’ve been thinking about this scaling in again. Here’s my thoughts.
The as advertised system would have you scale in 1 + 2 + 3 + 4 = 10.
The supercharged version proposed would have you scale in 1 + 2 + 4 + 8 = 15.
But here’s what I’m thinking:
It’s that last tier (tier 4) that you want to whack out of the ballpark because at that stage the trade has gone against you for at least four signals. So I was thinking that maybe it’s then prudent to stick to the as advertised version up until tier 3 and then pile on the difference at tier 4. So it would then go something like this:
1 + 2 + 3 + 9 = 15.
Your thoughts???
Essentially it affects nothing if the trades run their proper and usual course of about two or three days i.e. doesn’t change anything. But it’s that very last tier where things are supposedly seriously stretched in your favor.
Good thing though:
If these markets manage to say up today then at least and finally some entry signals to start shorting this lot with this trading system.
Doesn’t exactly fill my heart with joy knowing already I’m going to be sitting here in the freezing cold placing orders tonight. But hey: nobody said this was easy!!! LOL!!!
For the sake of posterity and in just looking through all of these charts and from hearing the banter (noise) in the background on Bloomberg:
What’s the bet the NASDAQ makes a new high (could even be today) and we tank pretty badly after that???
Well.
Finally some signals again.
Short the S&P, Dow, NASDAQ, and DAX just before the close last night. Tier 1 entries. These trades will be managed at detailed yesterday i.e. 1 + 2 + 3 + 9 = 15 (obviously these lot sizes adjusted as per risk based position sizing for each instrument). I’ve decided at this time for forego trading every instrument known to man at this time and stick to only these four. Main reason being is that with that pivot trading system of mine I’ll be going long and short (whatever is required) on these very same instruments at any given time during the course of these particular trades so margin requirements become an issue i.e. with that pivot trading system I go all in (full sized positions) on all trades.
Anyways. Let’s go!!!
For the sake of some fun and a bit of a tongue-in-cheek comment…
And people wonder why they get stopped out especially on lower time frames.
How many stops do you think were sitting just below that last little low point to the left of the spike???
AUDUSD 5m 02072019 0636 (just after RBA interest rate decision):
Even better zoomed out:
I can count at least three obvious places where the stops were taken out.
Markets closed up tonight. Tier 2 scale-in. No worries at all.
Hi Dale
When I first met you you seemed to be a strictly technical trader, yet here I see you taking fundamentals seriously. And posting a 1-minute chart. This worries me, that you might be swayed this way and then that way. Do you not trust the TPS system? (You did say you appreciate all comments.). I want you to succeed, so I don’t like this. Stick to the system, ban Bloomberg. Find other things to do when you are bored.
I should mention that I’m taking a long overland holiday through southern Africa. I’ll be in Lesotho this weekend, then heading for Botswana then Zim, Zambia, Namibia and back to Botswana as we head home to Cape Town (and rain) towards the end of July. I don’t thin I’ll have time to pop in here, so good luck all and hope you make plenty of money while I’m away.
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Hello.
Nice of you to pop in and say hello.
Nope. Nothing has changed. Now and I then I just post about things that may be of interest is all. Still doing my TPS thing by the book day in and day out as usual. Before I just didn’t have the free time on my hands to bother with all this stuff. Now it keeps me sane. Certainly not making trading decisions based on anything that I’ve heard, read, or watched on Bloomberg i.e. not allowing any of it to give me a bias one way or the other. Seems I may have overcome that hurdle too. So nothing to worry about with me nor the system. Only reason I don’t post so much here on this thread is that I think the work is done really. Only post my current state of affairs here daily insofar as trades are concerned. As of right now short the Dow, S&P, NASDAQ, DAX, and Nikkei.
As for the rest though: I am nailing daily pivots like it’s going out of fashion on my other thread on the topic. So I guess some of the info. creeps in here really. Certainly not dropping this system. But again: the other one is intraday trading with small profits so it keeps me busy during the day is all I guess. That said: I’ve made more out of those pivots in the last two and a half weeks than out of this trading system during the same period i.e. have had few trades with this system (this current batch are the first since bailing on those two stupid positions). So we shall see. Suppose the idea being is that this one should generate the larger profits while the other one is putting food on the table type of thing.
Dunno. Just seems like things that I couldn’t do or grasp before I’m now able to do with ease. Only possible reason I can think of is that I am actually now concentrating on what I’m doing during the day (this as opposed to jumping around all of the time with rubbish that’s never amounted to anything before).
Anyways. As I said. Nice to hear from you and thanks for checking in. Enjoy. Sure sounds like a darn decent holiday I’ll tell you.
Ah well. Looks like today is a write off (well: definitely for pivots anyway).
Added tier 3 positions last night after the close Nothing more to report really. Boring as hell.
Say what you like they’re still a good broker:
https://www.deltastock.com/english/resources/bundles/bundles-millennial.asp
Very interesting basket of stocks I must say. For sure going to add those that are missing to my main watchlist.
Well. Been a good week. Unfortunately not for the TPS though. When the markets tanked today I was up almost 2K and was tempted I have to admit. But price has now retraced a quite a bit so back into losses albeit that they’re small. Unfortunately have also not had the opportunity to scale in the last tier (tier 4) positions either (I did not count the new highs made yesterday). So it’s short we stay and interest we pay!!! LOL!!!
Truth be told: had they been full sized positions (bearing in mind I’m using the last supercharged method described above) the profit on the table would have been substantial and the chances are that I would indeed have caved and taken it and then shorted again before the close tonight. I mention this purely to note that sometimes your profits are of a material nature. And when you have bills to pay: well it’s a no brainer.
Well. Monday morning. All looking good with this system (as well).
Dunno the details of my last update but for the record I’m currently short:
Nikkei (first tier only unfortunately).
DAX (second tier only unfortunately).
S&P (third tier only unfortunately).
NASDAQ (third tier only unfortunately).
Dow (third tier only unfortunately).
Lot’s of unfortunates up there I know. But I chose to ignore the slight movement up on Thursday last week when the US was closed hence my not being in full sized positions (on the S&P, NASDAQ, and Dow).
Anyway. Again and all things being equal: if these things close with RSI(2) at the right place tonight well the profit will still be alright (good actually).
BUT NOW:
I may ALSO have figured out a way to squeeze those missed profits out of this system. And that could be by using the Momentum Factor as detailed in Wilder’s Trend Balance Point System. I’m still investigating. Not sure I’m going to try it today as I am going to have to withdraw profits and probably part of capital as I have bills to pay this week (not least of which is my damn rent). But I shall see. But the basic theory that I have is that Wilder’s MF has a nasty habit of keeping you trading the right direction until momentum weakens or starts to slow down or decelerate. So the idea being postulated is this: once RSI(2) has closed at or below 30 (talking short trades here) then you consult the MF. If the MF is still indicating that momentum is to the downside then you simply stay in the trade UNTIL the MF indicates otherwise (and this you will know before the close of the next trading day). Once the MF indicates that momentum to the downside (shorts again being used as an example) then you TP before the close on the next trading day (or on whichever trading day the MF gives and indication of trend exhaustion). The logic seems to work for me anyway bearing in mind that between Wilder’s TBPS, pivots, and my new toys: I’ve got more trades going on a daily basis and taking profits probably four days out of five with that combination. Point is: that MF has loads of merit to it for sure.
Oh well. Out for 923.95. So now flat. Rinse and repeat.
Definitely onto something here i.e. combining this trading system with Wilder’s TBPS (Trend Balance Point and the Momentum Factor). The trades that this system would have me TP on last night (and which I did by the book) are still going down. And the TBPS quite correctly indicated that the momentum was still indeed strongly down. But I shall monitor the Dow and the S&P and see where these trades would have eventually have ended up had I been using the TBPS trading rules. Bearing in mind that one knows the day before what the probable direction of the market is going to be the next day and one also know the day before where an instrument must close on the day in order for the momentum to have changed. Maybe this value could be used as a trailing stop. Either that or I must formalize the alternate method applied before i.e. calculate what the price WAS when RSI(2) reached it’s limits and use THAT price as the initial trailing stop. If the trade continues on the right direction then it’s a question of deciding on how to trail the stop from that point if not stopped out.
I guess what I’m saying is that as effective as this trading system is: it is capable of squeezing a lot more out of the market under certain conditions. There is nothing worse, in spite of taking profits, than sitting watching huge moves that would have been in your favor.
Jeez this burns me!!!
This lot have just traded to R2 on the day. That 900 would have been double at least by now.
Anyway. I’m now sitting and reverse engineering RSI again (cannot find my original spreadsheet that I used to use for this when I experimented with this previously).
Essentially the idea is as follows:
If RSI(2) has signaled an exit you check the TPBS. If the TBPS indicates that the trades are still in the right direction you then lock in profits at the price point where RSI(2) actually hit 30 or 70. If the TBPS indicates otherwise then you simply TP as indicated by RSI(2). I cannot think of another or better way to do this.
Looks like we’re setting up for some trades (shorts) finally.
Will check in the morning and place limit sells.
Not sure if I mentioned this at some point but with pivots I’m really concentrating on the Dow, NASDAQ, and S&P. And MAYBE the DAX. Just seems to me of late there’s little to no point using my shotgun approach and trading every instrument known to man. It becomes very difficult and time consuming to begin with. And frankly: one could make more money with bigger position sizes on the S&P and the Dow than you would trading most of the other stuff. And not to mention the costs involved especially with shorts. Anyway. That’s my current take on things i.e. as we know this changes frequently. And sometimes of course: some signals and trades are just too good to ignore. For example: if you’d not been scaling in on something like Italy and you get to the point where you would already have scaled into to a full position but had not as yet: well those are always great trades i.e. you’re fully loaded right from the get go and usually at an extreme price. Anyway. That is it for the day.
Morning.
Well sometimes it sure does pay to be a Johnny-come-lately. With this system anyway. The Futures have been on a real rip overnight and I’m pretty sure there’s going to be nice follow through today. So not placing any limit sell orders this morning (we’re way past where those orders would have been placed anyway). Well: not placing any limit sell orders for THIS trading system but for sure will be fading pivot levels but that’s for my other thread.
Well for what it’s worth:
I’ve not done the “how much am I making” exercise for a while now. But figured I’d better download the transaction data because the transaction history starts dropping off from the beginning from three months back (and then I only have access to monthly statements which are in PDF format so I cannot do any calcs. on the data once that happens).
Well to my pleasant surprise:
I’m up either by 8% or 18% depending on whether I use my initial capital deposited or my now capital (as I was able to increase my capital about four weeks ago).
And the above includes those two debauched trades where the lot sizes were more than double than they should have been due to my error made. So if I normalize those two losses to what they SHOULD have been had I not screwed up:
Then I’m up either by 33% or 15% again depending on whether I use my initial capital deposited or my now capital (as I was able to increase my capital about four weeks ago as already noted).
And this is NET i.e. after all charges etc. (which I can tell you have been substantial since May).
Edit: for the sake of interest just worked out the value of the additional debits and credits e.g. dividends paid or received, interest paid or received, etc. etc. etc. Not actually material i.e. depending on which capital balance used in the calculation it’s either around 3.7% of capital or around 1.7% of capital. Certainly nothing to bother about.
But I do have to add this:
There have been relatively few trades with the TPS I’m afraid i.e. the bulk of the above to a VERY large degree has come from WIlder’s TBPS and pivots (and now as of late my intraday or day trading of the US Indices with TradeStation).
Makes it all kinda worth it then (the late nights and slog).
And one other thing that must be added here:
Since implementing risk based position sizing for this trading system: lot sizes have been radically reduced from those days of simply estimating (thumb suck) what they should be for any given trade. The reason that this is important: I’m no longer entirely sure if this trading system is indeed going to be good for my quoted 5% - 10% per month on average as has been stated numerous times on this thread. I know @Spudfan has done some extensive testing and based on his extensive testing I could be wrong in making my last statement. And I’m not about to go back historically to see if I’m right or wrong. I do know that for some or the other very obscure reason: this may very well have been the quietest three months for this TBPS trading system i.e. I don’t remember ever having this few trades with it in the last five years. I was pretty much either long or short at any given point in time but that’s not been the case this year for some or the other reason.
In closing this post:
I’ve FINALLY managed to get my act together and reverse engineer RSI. I shall be implementing this from now on with this trading system. It may result in lesser profits on those trades when price immediately reverses. But for sure it will keep you in those trades where a trend develops i.e. no longer will you be sitting on your hands watching what WOULD HAVE BEEN hugely profitable trades passing you by.
Tx for the Adam Theory link.
I’m on page 72. great intell to be reminded of. Very easy read and understandable, looking forward to finishing.
KC