Nah. Alright. Too many signals to ignore.
Orders placed after the close on:
Euro Stocks 50 (Executed)
France 40 (CAC40) (Executed)
SP 500 (S&P 500) (Executed)
US Tech 100 (NASDAQ) (Executed)
Wall Street (Dow) (Executed)
Gold (Order Not Execute but will leave pending for now)
Whoaaa… Looks like it’s rock and roll this morning!!!
Good day for this system believe it or not.
All orders above were executed last night as indicated above. So of course losses throughout the day. Maximum intraday drawdown was only 2.85% or thereabouts. This is telling me that my new fandangled method of calculating lot sizes is spot on i.e. no wild swings.
Obviously will now tonight be scaling-in but on as advertised signals i.e. carrying the 1-day entries from last night and opening new as advertised positions tonight. And certainly spoiled for choice. I’m excluding only Spain from this batch of trades and this only because I have to watch margin requirements (bearing in mind I’m trading with extremely low leverage and Spain would hog a whole pile of margin if I were to have to scale-in on it to a full size position). Remember also that I’m trading with limited capital here which is unfortunate (limited by my usual standards anyway). But then again: the lot sizes are relative as they’re being scientifically (for want of a better word) calculated and adjusted accordingly.
So yeh. Don’t think I’m going to bother detailing individual trades here tonight. Am tired. And it’s cold. But anybody following any of this should easy be able to track the trades.
Cancelled my Gold order though. Not in the mood (as odd a reason as that may sound). And I guess I have to admit that my little fiasco of last year on Gold still plays on my mind. I seem to remember reading last year that June is traditionally one of the worst months for Gold. Unfortunately for me I only read that when I was already DEEP in a hole on Gold last year i.e. if memory serves me correctly I went long Gold last year at around this very same time and only alleviated the pain at the end of August last year. Aside from anything else that’s a pile of interest over those months. And still upsets me to be honest. Just looked at the chart again now to be certain of my dates. Had dozens of opportunities to either get out at a smallish loss, go short, or even go long even on the way down thus ignoring the 200-day SMA. Would still have ended up in an overall profit. But no. The hole got so big that it was just inconceivable psychologically to take the knock. So instead decided to buy (no pun intended) into everything else (forecasts and analysis to justify still being in the trade) i.e. that Gold WAS going to recover to $1 300. It did. In JANUARY!!! Just giving some insights I guess. And reminder to self!!!
Right. Morning. An update.
Anybody that may be watching this will know that as things stand right now: I’m sitting on losses obviously to the tune of 8% currently. Not the end of the world at this stage and totally manageable of course. Not that I’m claiming bragging rights for this either i.e. I’m willing to bet (no pun intended) that were it not for a) the ESMA leverage restrictions and b) my now correctly calculating lot sizes for this system: I’d probably be in trouble. That’s about as honest as a person can be. I note this purely for those that may ever follow a trading system like this. High leverage WILL finish you off. As will incorrect position sizing.
The above is the GOOD news. The BAD news is this: under normal (personal) circumstances I’d let these trades run to their ultimate and logical conclusion, no matter what, based on the trading system. As I’ve just noted on another thread: if traded correctly this system has an uncanny ability to turn things around on a dime if followed correctly. But due to (personal) circumstances I am in no position to be flirting with a loss of capital. So in all probability I will cut my losses at the amount equal to the profits for this month. And will just have to start over should it come to that. It would be a great pity as I believe I’m in some really good positions that have some relatively major profit potential (this of course assuming that this is not the end of the markets as we know them of course) (and I’ve no reason to believe that’s the case). It may sound odd to some but this system capitalizes on the notion that nothing ever goes straight up or straight down. I’m furthermore only scaled-in fully on four instruments at this time. True: were I fully scaled-in the situation would be worse. But that’s just the way this system works. And bottom line: if I can manage to hold then I believe I’ll be scaling-in at very low prices. And I’ve been around long enough to have seen these markets turn around on a dime and as if by magic. No guarantee this is going to happen. But to date I’ve no reason to not trust what I’m doing and to mistrust this trading system.
So that’s it for now. No point in posting detailed trades at this time. It is month end, however, so I will be posting the current state of affairs as it stands after all is closed and said and done tonight.
Regards,
Dale.
Well the markets continue to drop unfortunately. And in the absence of some or the other catalyst to turn things around: I don’t see any glimmer of hope on the horizon for myself at this stage. I’m pretty close to having to close everything out to preserve my capital. Sorry folks. It just is what it is at the moment. Were I trading with decent capital and didn’t have bills to pay there is no doubt that I’d hold on as noted in my previous post. I just don’t have the luxury at the moment. I’d rather (and have no choice really) live to fight another day with my capital intact. If nothing else: I believe that given my current situation this is the prudent and mature decision. Strangely: I’m rather calm about it. Of course I’ll be disappointed at having to write off three weeks of work, late nights, doing things right, etc. But it just is what it is for now I’m afraid.
Sadly: there’s no doubt in my mind that were it not for my circumstances that these trades, particularly with being able to still scale-in at least three more times on most all of the instruments, will turn a nice profit. I will follow them through for the fun of it.
One thing that does feel strangely good: I’m not bailing because I’m near a margin call or anything like that. So screwed up as this may sound given what it is that I think I’m about to do: I’m strangely confident, more so than ever, with what I’m doing. Who knows. Maybe I’ve FINALLY cracked it from a psychological point of view.
Anyways. Enough personal musings. On a side note: one does tend to look for signs that maybe things could still be on the right track. I do it from time to time. Fine example is below. While I don’t use Fibs. and I don’t believe they’re magical numbers or levels: there is usually no denying or explanation as to why price does indeed respect these levels. Self fulfilling prophecy maybe??? I’ll never be sure. But I’m willing to take a side bet that the S&P is going to trade to it’s 38.2% retracement and bounce. In all probability that bounce would have this system TP on all of these positions. That level is at 2 721 or thereabouts. I’m not saying that it’s not going to go lower after that. But that’s the point with this system.
Anyways. Enjoy.
S&P500 Daily
There is another thought here (and I’m just going to keep posting if for no other reason than that it serves as a record and future guide for myself). This on the question of stops for this trading system.
If you’ve taken a look at the TradeStation tests: one thing that was noted and that resulted in an improvement to the system was using a fixed and hard stop equal to a certain monetary value. Assuming that your positions are correctly sized: this could very well be the way to go.
Example:
(And it’s no secret, I guess, if you’ve read any of my other posts, that this account only has the grand sum of R28 000 ZAR in it right now). In keeping with the above: I based my position sizes on a 5% risk per position size (using ATR(14) but that’s a different discussion). So as I sit here: other than Hong Kong thee is not one single position that is anywhere NEAR a fixed loss of 5%. And Hong Kong is still under 2/3 to get there. I guess what I’m saying is that it could be prudent, or at very least and idea, to start implementing this hard stop idea which, in my case right now, would be the equivalent of R1 400 per position. Comfortingly: this really does fit together nicely. Hong Kong is the main losing position at the moment. If the loss on that position got to its 5% mark then close it out at market. That would certainly lighten up the load. And free up a lot of margin (Hong Kong being the largest margin hog of all of these instruments).
Oh well. Will see. If I don’t cave on preserving capital this could be the way to play things here. If I do: food for thought going forward. Point is there is evidently a nice correlation between my position sizing and risk size. Call it a nice and fine balance if you will.
Now this is very interesting. Hang Seng below. Oddly enough and at this time: the drops all seem to have stablized. I wonder if this could have anything to do with the price of eggs???
Hang Seng Daily 31052019 1225:
I think my biggest concern here is that it’s Friday. My problem with this is that I don’t believe I’m in a position to take chance and hold these positions over the weekend given my situation. While price may reverse on a dime: the last thing I need is some or the other event over the weekend that causes this lot to gap down. I’ll then not have the option (obviously) to close out at my comfort level.
the struggles doctor, the struggles…hehe
About 9 months ago I found myself in your situation… I was trading SP500, with some scaled in positions. and at some point the drawdown (monetary value) was equal with the profits I made on that account, The question I was asking myself was “should I close everything and keep my intial capital?”
Unfortunately, I did not respond with yes to that question and 3 weeks later I had to close everything taking a loss of 70% of my initial capital
This is not the case here, but don’t do something you will regret later.
that’s my 2 cents
Hey. I really appreciate your input. Thank you. Much appreciated. Really.
The saving grace here is that this system will give you a signal to exit whether at a profit or at a loss. In other words: I don’t think I’d be holding on ad infinitum and living in hope that price comes back to me if that makes sense. Of that at least I’m confident. (This being said: I broke these rules last year on a Gold trade and the end result was EXACTLY the same as your experience i.e. took me between January and May of last year to make R120K and that one Gold trade cost me R70K by the time I couldn’t take the pain anymore) (and of course by that time I’d withdrawn out of the account so margin was becoming an issue at the time too). So yeh. I think I’ve learned my lesson where that’s concerned anyway.
Oddly enough: not two seconds after I closed Hong Kong out things started to turn slightly on everything else. Nothing dramatic. And certainly nothing that makes me comfortable enough to go take an afternoon nap though that’s for sure!!! LOL!!!
I guess another way I could play this is get out of Italy at a small loss and Japan at a small loss. Because these, and Hong Kong, have high tick values and very high ATR values when they move they sure do move. Nice if things are going your way. Not so great of you’re on the other side of course. And those are the biggest margin hogs. Guess what I’m saying is that by closing out those two it would slow down the P/L swings somewhat. And if there are any further surprises: well they will not be severe.
But to be honest: I’m in an unfortunate situation right now and I am indeed leaning toward just preserving initial capital and coming back when the coast is clear if you know what I mean. It’s a pity though to be honest. Were it not for this situation there is no question I’d see these things through i.e. this system has never let me down (unless I’ve gotten too clever of course but that’s not the system’s fault obviously).
But hey. i appreciate your popping in. I notice that that nobody else… Never mind. Not worth it.
Thanks again.
Regarding this I will leave you with a quote from Invictus:
" I am the master of my fate,
I am the captain of my soul. "
Keep us posted
Is that any good??? Been meaning to watch it. I think it’s on Netflix. (Assuming you’re talking about the movie called Invictus which is about rugby if I"m not mistaken). Otherwise: forgive my lack of culture!!! LOL!!!
The movie is all right…and yes… it’s about rugby
I was referring to the poem Invictus by William Ernest Henley… hehe
Hi @Julakis good to see you again!
Dale, (@dpaterso). I’ve been out all day, today. Just got back. There are some things I’d like to add here, but a sandwich and a(nother) coffee first…
I out.
You know what: I refuse to let myself become a slave to this business as I have done over the years. Sit here like a chump hoping that I’m going to be able to squeeze through the door by a few points. And then sit with the worry that this maniac in charge of things has nothing to do over the weekend but send out Tweets or make trouble somewhere. I don’t want to be the last guy in the bar trying to pick up the barmaid!!!
Capital intact. Nothing lost. Matter of fact: 2.4% gain for the month!!! LOL!!! Sorry folks. Pretty sure that’s not what you were expecting. Still better than the bank though!!! LOL!!!
If anything: probably been worth it (these last three weeks). This the first time I’ve managed to work out and implement correct position sizes for this trading system and they’re spot on. Furthermore: I think I’ve worked out that a fixed stop based on those very same position sizes could be the ticket actually (as long as it’s a mental stop i.e. not going back to the days of being stopped out for fun). Put another way: there is no way that without a fixed stop in place that this system would not have cost you some serious money if this whole lot ended up tanking to December levels. I just honestly thought that a fixed stop would interfere. But I can tell you that with a full position on the Hang Seng that still had a third of the way to go to reach that fixed stop: that tells me that 5% based on my position sizes is correct. Point is really that if the Hang Seng had actually reached that 5% then RSI(2) would be so far away from reality that the position wouldn’t even be able to break even (although this is a slippery slope because although it would always end in a loss it may not have been that big). Anyway. That’s it. Sure I could have used the money. But oh well.
So I’ll be back next week Mr. Market. Go take out some other poor sap. (No offense is meant by that).
So there you have it folks. Must say: for some or the other very strange reason this actually feels quite good. Empowering is the word that comes to mind. Certainly not something I’ve ever approached in this manner before.
Put it this way: there’s only ONE thing that you can be 1 000% sure of in this business and that is that there will be another trade around the corner.
FOR THE SAKE OF CONTINUITY:
I shall now be waiting for RSI(2) to signal the closing of what WOULD have been my trades. In effect this means those trades would have been over. And then time to wait for new entry signals. Rinse and repeat.
Oh and I MAY (note MAY) see where things close tonight and then be very selective about re-entering and starting to scale-in again from scratch. I don’t think there’d be anything wrong with this logic. BUT: prices would have to close definitely lower than yesterday for me to consider.
One demon I can see myself having to deal with here and that’s shorting these markets as indicated by the 200-day SMA. The Dow closed below this thing for the last three days and right now as I type this the S&P is trading below it. The NASDAQ is right on it right now. And as many will know I have a long bias.
Funny thing is here:
After taking such a decision you’re not sure whether to feel like a coward or to be proud of yourself for taking a decision to clear out clean and start again when things have calmed down. It’s a pretty hard pill to swallow when you’re wrong. Seeing the way these things move lately: it’s certainly not a stretch to believe that there’s a possibility that they will turn on a dime and rally. That’s not an easy thing to sit and watch. Especially knowing that you’ve done everything by the book (well pretty much) and put in the effort. And not to mention being up 15% on the month before this.
I don’t know if this is just a cop out to make me feel better but I repeat one of my all time favorite sayings which was a old forum member’s signature some years ago and that I’ve never forgotten (but this being one of the few times I’ve actually managed to implement it):
“I’d rather be out of a trade wishing I was in than being in a trade wishing I was out”.
Oh well. Enough ramblings and musings from me for now.
(I think I deserve that afternoon nap now!!! LOL!!!).
This!
Combine this with the other quote from above…:
…and you have a fine recipe for consistent, long-term, productive and confident trading.
and if one also considers:
and combine that with my own favourite quote:
“A ship is safe in harbour - but that is not what ships are for…”
Then I think we have a very complete picture of what trading is all about: Looking for above average gains by making your money work as it is intended to, but avoiding potential storms even if it means missing out on a few opportunities.
I was just wondering, Dale, have you ever thought of combining this RSI2 approach with an identifier of the underlying trend on the weekly/daily trend? It just seems to me that your principle is to enter on overbought/sold pullbacks. Surely if that was restricted purely to those pullbacks that are against the main stream then your RSI2 would be like loading shot into a tightly tensed catapult just waiting to be fired back in the trend direction?
Hey.
Thanks for the message.
When you put all those quotes together and summarize like then nothing lost.
My problem right now though is that I’m doing this to survive. Not just to pass the time or make some spare cash to blow. I really don’t have a choice in this matter. I wasn’t joking on @The_Baller’s thread yesterday when I said talk about being between a rock and a hard place i.e. gun to the head or trading. How’s that for a choice in life. I do no exaggerate or embellish here I assure you.
Anyways. Obviously I’ve checked the markets. They’ve not come back sufficiently so as to make me regret my actions this morning. And the day is still young too at least insofar as the US day is concerned. So I guess we’ll see.
I’ve had to withdraw R5K anyway (actually only remembered that after I’d closed everything) so there’s that. That for sure has put paid to me trading any of my high rollers (Hong Kong, Japan, Spain, Italy) so whatever happens from here is going to slow things down a bit. Maybe I’m just flogging a dead horse here (not in reference to what I’m doing here but in general).
The RSI(2) approach is meant to capitalize on just that i.e. pullbacks (as you’ve worked out). I hear what you’re saying. But to be honest: this thing really has never let me down. Not even today i.e. today was an executive decision (which given that I’d forgotten that I needed to withdraw money would have ended up with my closing out Hong Kong and Italy anyway just to ensure that I wasn’t flying too close to the fire insofar as free margin is concerned). I’ve tried finessing this system by including goodness knows what else. Doesn’t work. As is (and with my little deviations) it just works. And if I wasn’t in my current situation I would not have even thought about closing out for this reason.
Anyway. I will be getting back in again with reduced position sizes due to a reduction in capital. And obviously: none of my big payers. All good I suppose.
As I’ve noted (and had some more time to think about this): at least my position sizing and risk management (in spite of no stops) appears to be spot on. This is one thing I’ve never really gotten right up until now. I furthermore worked out that with this 5% fixed stop idea: even if every single one of my open positions had reached that level: the account would not have been wiped out and what was left would pretty much be equal to the margin requirement on those trades. That’s telling me that I seem to have hit on a perfect matrix type thing. That’s been the only little thing that’s nagged me over the years with this trading system. And for sure had I had all of this in place last year my Gold trade would never have turned out the way it did even if I’d gone against the system as I did. For one thing the lot sizes would have been correct. And I would have been forced to bail when my fixed stop had been reached.
Oh well. There you have it. A bit disappointing as I sit here now. But I’m sure I’ll feel better once I’m back in and comes next week.
Regards,
Dale.
I have no doubt about that, for sure! That s one key ingredient of a good trader - the bounce back factor! 
I don’t know that thread (I don’t read much here these days). But again I am really sorry to hear that. It must be an agonising situation - actually like we tried to warn about on that thread recently about trading for a living? But no one wants to hear anything that might scar the dreams! And I guess that is OK!
I will look into a version of this 2RSI during next month. I have been trialing on the quiet a way to day-trade from the Daily chart and this could actually provide a little extra timing input. Basically, deciding the next day’s direction on the previous day’s details (not every day) based on gaining a edge, then setting a stop and target with a R:R that favours the TP. If the win rate is >50% and the R:R > 1:1 then there should be a progressive gain. It would be a nice scheme to run alongside my normal discretionary trading.
I am not around much during the next 2 weeks, got a big renovation project on. But will let you know if there are any signs of any value in this!
Hey thanks. Also much appreciated.
Yeh and as I’ve mentioned before: I don’t think there’s anything magical about RSI(2). As noted: because the period is so short the averaging is negligible i.e. you could probably just look at two or three higher or lower consecutive closes really. The secret sauce to this system really is the scaling-in technique is all. And other than your first initial entry you only scale-in on lower closes while in the trade i.e. RSI(2) is ignored after your first entry and only then used to close out the position. But it works well. Put another way: if nothing else you must know that for me to even attempt to pull this off, using the very last money that I currently have at my disposal, I’m pretty cock sure of the robustness of this trading system. In a bad situation I am. Stupid I am not.
Suppose i may as well put it out there i.e. I’m sure there’s more than one person wondering. I’ll try my best to give you the short version. I’ve been selling commercial property for the last seven years and I have done well. These are huge properties so the commissions have been substantial albeit that we’re only talking about maybe two deals per year. Never had an issue with any of the deals either i.e. all gone through like clockwork. Last deal was last year and should have gotten paid by the end of February or March this year. And we are talking about some very serious money here. Needless to say I didn’t foresee any issues at all with the deal so didn’t make provision for such an event (yes I’m well aware that I should have). And then problems started cropping up (not worth mentioning here) between the Buyer and the Seller. And between the two of them there’s been no urgency to resolve. Nevertheless: up until this last week progress had been made and all things being equal I would have gotten paid within the next three months or so. And then a so-called black swan event occurred just this past week that not only could result in this all being delayed even further but could even result in the total cancellation of the said deal. This was really not something that anybody could have foreseen. In the interim I’ve had to sell stuff (everything and which included my car): the theory being that I’d be able to hold out for the next three months or so until I got paid. And, well, that’s now looking less and less likely. And of course I’m now really and truly snookered. Without transport I cannot even attempt to continue in the property business. And in this country: let’s just say I have more chance of winning the lottery or making +5 000% ROI on my capital in a day than I have of getting a job. In addition and in spite of the romance that everybody seems to have with Africa and in particular South Africa: you end up on the street i.e. you don’t get given free medical and food and council housing that’s for sure. Couple all of that with having no family. And so-called friends that you’ve actually given money to (not lent but given) over the years and who now are nowhere to be seen (full of excuses) (but who are dead to me now thanks to this). And, well, pretty obvious where this lands up isn’t it. If nothing else: I will not end up on street though. That is a promise I’ve made to myself. That’s not a life and it’s certainly not living. Not here. There are worse things that can happen to a person than being dead let me tell you. And living on the streets of this messed up country is one of them. So there you have it. Oh there are one or two other prize individuals that have contributed to this debacle. They’re not walking away unscathed if I go down. Of that you can be sure. They just don’t know it yet. There is a saying that I personally have always tried to abide by: never fu*k with a man that has nothing left to lose. So there you go. I’m not on the bones of my you-know-what because I’m a failed trader. In fact and in spite of my Gold trade that went south last year: I still made a semi-decent profit last year after all said and done. Were it not for that this situation would probably already have sorted itself out and we’d not be having this conversation and you’d not be reading this. And no: ending up like this does not make you a better person for your troubles. And even if I manage to somehow resurrect this deal or trade my way clear: I’m not going to look back on these days with fondness and give myself a pat on the back for coming out the other side. It does things to a person. Maybe not to others. But it has to me.
I see what you mean, Dale. That’s a real sad and difficult situation and, i guess, as far as the commercial premises is concerned, pretty much outside your control!
I didn’t know that SA can be such a difficult place to live in!
It is a real downer that you have this extra pressure on your trading. It is not a good situation to have to make a certain amount in a certain time. And even worse to have to draw capital to live on!
But i am sure you will get through this period and hopefully that deal will end up ok. And if wishing has any power in this world then there is a lot of wishing going on for you!
But you have a “customer” waiting, @andy111, so i won’t say any more… Have a good weekend!
