My journey to long term consistency

This is a discussion on My journey to long term consistency within the Trading Journals forums, part of the Reception category; Yesterday I entered another trade, it already got stopped out. Long TE Amount: 50 shares Opening rate: 53.56 Opening time: ...

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Old Sep 22, 2015, 12:48pm   #25
Joined Aug 2015
DrSafari started this thread Yesterday I entered another trade, it already got stopped out.

Long TE
Amount: 50 shares

Opening rate: 53.56
Opening time: 2:33:50 PM 9/21/2015

Stop loss: 52.38
Amount risked: 59€

Close rate: 52.38
Closing time: 9:56:36 AM 9/22/2015
Net P/L: € -59.00

Chart is a 15 min chart. Green arrow is open, red one is close, red horizontal is about where my stop loss was. General trend of the chart was up, although it's not obvious on this part of the chart.

te_long.jpg

Not every trade that goes wrong is a bad trade but this one is in my opinion. The chart didn't look perfect but because there were not many candidates this month (only 2 instead of the average 4-5) I decided to take it anyway. Mistake #1.

Mistake #2: I shouldn't have gone long in the current market. Since the China thing on August 24th the market felt bearish ever since. The Fed decision didn't help. Writing this down I feel so stupid to have done that trade. I'm sure I could have found a stock to go short on that had an equally good chart (or even a better one) than this did.

Things to improve: My entry point. If I had chosen my entry point more carefully I wouldn't have been stopped out yet. At least this time I didn't blindly enter the position but I tried to choose a better entry point. I have difficulties with this because whenever I see it going down (when I want to go long) or going up (when I want to go short) I'm afraid that the trend will actually reverse. This is a psychological thing because as long as the downwards or upwards fluctuations are within the expected parameters of the volatility of the stock I have no reason to believe that the trend will reverse. Because of this my entry points are often on a top (or near the top) when I'm long and in the pit or near the pit when I'm short.

Also, once I see a good chart that's approved by my trading system I am impatient and want to enter a position ASAP, another psychological issue

Now that I'm aware of these things I can work on them. I lost a small amount of equity but these lessons were worth it imo.

So next time I wil focus on choosing a good entry point so my brain will learn that the trend won't necessarily reverse.
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Old Sep 24, 2015, 2:44pm   #26
Joined Aug 2015
DrSafari started this thread I'm trying out the Triple screen trading system explained in "The new trading for a living" in my demo account. So far not much trying has been going on because it's REALLY difficult to find a stock that matches the criteria. This makes me think I'm doing something wrong but I've been reading that part in the book over and over again and seems I'm doing everything right. Could also be that the current market doesn't produce many opportunities according to that system or you just have to go through a ton of stocks before an opportunity arises. Time will tell I guess, I will have to have discipline to monitor everyday and be patient. If I can't even do that I don't deserve to be able to trade for a living in the future.

On one hand it's good because it will discard many bad potential trades, on the other hand it's annoying, especially when testing and you don't know what to expect. I guess I'll just have to monitor a ****load of stocks. Another good thing is that it's purely technical and I don't have to "wait" for any economical indicators. I can do this everyday on every stock. If I keep a list of 100 stocks and keep monitoring them every day something must meet the criteria sooner or later. So far I'm only monitoring 14 for 3 days so that's not saying much I suppose.

Meanwhile I'll still continue to trade with my old system for real money. So far I seem to be making more money with it than losing (albeit not that much) but I can't conclude anything yet.
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Old Sep 24, 2015, 3:13pm   #27
Joined Aug 2015
DrSafari started this thread Ok, looking back in history I see there are opportunities so it's just a matter of time and/or monitoring enough stocks. Just writing this down to remind myself.
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Old Sep 30, 2015, 8:17am   #28
Joined Aug 2015
DrSafari started this thread Demo account
So I've been monitoring 15 stocks with my new to be tested trading system. Yesterday 2 came out as potential trades. Part of the system is to track the daily stochastic and if there's an uptrend you should place a buy order when stochastic lines drop below there bottom reference line thus indicating being oversold and vice versa. I'm testing on USA stocks and am doing this before market opens.

With both potential trades the stochastic lines didn't go perfectly over the reference line, only near it (one upper and one bottom reference line for long and short positions) but because I was excited about opportunities and thought it couldn't get any better I placed some orders already. But now I see yesterday's stochastic values are even better, so it pays to wait.

Yesterday the buy order for the long position (Activision) got already triggered, but because I entered too soon it kept dropping and almost triggered my stop loss. At the time I thought the system wasn't as good as I thought it would be, but now I know I should have waited for better stochastic values, because for both potential trades the values got a lot better. This won't always be the case of course, but that's the whole idea of the system.... filtering out bad trades.

Demo account equity ~12000€

So this is my open long position:

Long Activision
Amount: 250 shares

Opening rate: 31.00
Opening time: 9/29/2015 4:00:06 PM

Stop loss: 30.18
Amount risked: €182.79

Current rate: 30.64
Current Virtual Net P/L: € -82.22

This is the chart, it's a daily chart so I entered somewhere near the top of the last bar. On the daily chart, stop loss line is very close to current sell rate :

activision_long.jpg
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Old Oct 1, 2015, 9:46am   #29
Joined Aug 2015
DrSafari started this thread Start of a new month so I should analyse the European Economic Sentiment Indicators again and look for some new stocks with my real account. I still think this system is profitable in the long run with the knowledge I gained meanwhile. I've only been applying it properly since July (and even then) so it's too soon to tell. Lost some money due to the china thing mistake there was to let all my trades reach stop loss instead of cutting them sooner. And it were 6 of them, all long unfortunately. Ouch. Should have diversified. Bottom line, can't draw any conclusions yet but since I still see potential in it, I will continue with small amounts of real money. It's also important to trade with real money cause psychologically it's different... although lately I don't seem to make much of a difference between my demo account and real account. If I see potential trades on either of them I seem to be equally excited, I don't seem to make a mental distinction between the two anymore and I'm treating them with the same discipline. I say "seem" because maybe my brain is fooling me.

That being said. Some interesting things have come up while monitoring my 15 stocks on my demo account. This is how I monitor my stocks in a text file:

Code:
Activision
		1st screen Impulse system =		long
		2nd screen Stochastic = 		85,89 / 76,86 / 23,61 / 16,38 / 25,22
		
		--> action = order was placed on 23,61 but should have been placed on 25,22
I determine the general trend by a weekly screen. In this case it's an uptrend hence long. Then I wait for a good time to place an order on the 2nd daily screen and I monitor the Stochastic values daily. I wrongly placed the order at 23,61 which caused me to enter the trade too soon. I should have placed it at 25,22. No real harm is done because my stop loss wasn't reached but potential profit margin is now less of course.


Code:
	Agco
		1st screen Impulse system =		short	
		2nd screen Stochastic = 		59,31 / 77,48 / 69,69 / 91,79 / 86, 82
		
		--> action = placed order at 69,69 but should have placed it at 91,79 or 86,82
Here the order didn't get hit yetso I can adapt my order now since 86,82 are good values. Looking at the evolution of the stochastic I would say it's the perfect moment now.


Code:
	Allison Transmission
		1st screen Impulse sysem =		short	
		2nd screen Stochastic = 		12,9 / 12,10 / 16,14 / 33,20 / 95,48

		--> action = wait
This one starts to look interesting. Can't enter yet because stochastics aren't above or near 80 yet. Seeing how they evolve they probably will be tomorrow.


Code:
	********** Financial 
		1st screen Impulse sysem =		short	
		2nd screen Stochastic = 		35,26 / 62,38 / 7,35 / 59,43 / 97,54

		--> action = wait
Same as above, starts to look interesting but can't place an order just yet. Tomorrow looks promising.
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Old Oct 2, 2015, 3:14pm   #30
Joined Aug 2015
DrSafari started this thread Demo account testing trading system

I'm still long in my Activision trade. Price has almost reached my stop loss because of the bad Nonfarm Payrolls results yesterday which suprisingly didn't have much impact right away but only now seems to have an impact on stocks globally.

Code:
	Agco
		1st screen Impulse system =		short	
		2nd screen Stochastic = 		77,48 / 69,69 / 91,79 / 86, 82 / 18,65
		
		--> action = 	adapted order to 45.95 price on 86,82 stochastic
I said I put my order wrongly on the Agco stock and I did but of course it didn't get hit yet so I adapted at the time the stochastic values read 86,82 and it got hit. Started making profits right away but instead of following the money management rules of the system I kind of followed the rules of my system I use with real money, meaning I left too little margin for my trailing stop loss and taking a small ~80€ profit.

Realising this I re-entered short position and it's making profit again. I will post details and charts when I have the time.
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Old Oct 5, 2015, 3:38pm   #31
Joined Aug 2015
DrSafari started this thread Demo account
Agco got stopped out at a ~60€ loss. Both trades combined making a small 20 € profit. Reason I re-entered as mentioned before is because I took profits too soon according to the trading system. So would have made slightly more if I had let it run (and trailing stop loss like I do) because of paying the spread only once instead of twice.

Agco First Entry
Short Agco
Amount: 100 shares

Opening rate: 44.73
Opening time: 10/1/2015 3:31:36 PM
Stop loss: did not record
Amount risked: I think it was around €180

Close rate: 43.84
Close time:10/1/2015 5:11:34 PM
Virtual Net P/L: € +79.47


Agco Second Entry
Short Agco
Amount: 100 shares

Opening rate: 43.90
Opening time: 10/1/2015 5:26:23 PM
Stop loss: did not record
Amount risked: I think it was around €180 again initially

Close rate: 44.61
Close time:10/5/2015 3:30:34 PM
Virtual Net P/L:€ -61.74


Activision (long) which nearly hit the stop loss because of the bad Nonfarm Payrolls results is rallying again so it's good that it didn't hit its stop loss. I placed 3 more orders according to the system who may or may not get executed. I do wonder how long the order is still "valid". That's not really explained anywhere. I guess I'll have to use my common sense for that. I guess if the long term trend is changing it's no longer suitable and if not it would probably get a fill anytime soon anyway.

Tonight I'll have some candidates for my other system with real money.

Last edited by DrSafari; Oct 5, 2015 at 3:44pm.
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Old Oct 6, 2015, 4:26pm   #32
Joined Aug 2015
DrSafari started this thread Real Account

I had 4 suitable trades coming out of my real account system. But I got into them too soon again. Why too soon ? I had noticed afterwards that today it's the ECB President Draghi's Speech. From experience I know this can have a big impact on european stocks. And I was currently holding 4 european long positions. Luckily all 4 were already making profits. I quickly took profits on 2 of them (Ko and Me). Wanted to get rid of a third one too but couldn't get a fill so I just put a higher stop loss to reduce risk, that one got stopped out now (Rh). And I'm still holding 1 of them with a small profit and minimal risk so I'm holding on to that one.

But again, need to learn to be a bit less eager if I see suitable candidates and a nice clean chart the way I like it. Hard to get rid of this habit

I will re-enter all 3 positions if their trend seems to continue after the ECB's president speech.

I probably won't post charts all the time as it's quite a hassle. They're usually not that useful either, if I don't include a daily or hourly long term chart and a 15 or 30 min short term chart. If I only post the long term chart you see the general trend clearly but not the entry point. If I post the short term chart you don't see the long term trend perspective. So I will post less charts but when I do I will include a long term and a short term one.

Closed positions:
------------------


Long Ko
Amount: 100 shares

Opening rate: 36.54
Opening time: 10/6/2015 10:46:09 AM
Stop loss: again, no time to have it recorded
Amount risked: too much, broke 2% rule slightly

Close rate: 37.29
Close time:10/6/2015 4:19:55 PM
Net P/L: € +75.00


Long Me
Amount: 250 shares

Opening rate: 20.55
Opening time: 10/6/2015 10:14:34 AM
Stop loss: again, no time to have it recorded
Amount risked: around 2%, I think it was €88

Close rate: 20.80
Close time:10/6/2015 4:20:01 PM
Net P/L: € +62.50



Long Rh
Amount: 250 shares

Opening rate: 19.68
Opening time: 10/6/2015 9:20:12 AM
Stop loss: again, no time to have it recorded
Amount risked: too much, broke 2% rule slightly as well

Close rate: 19.59
Close time:10/6/2015 4:34:59 PM
Net P/L: € -22.50

Current equity: € 4,683.38



Demo account
Today's stochastics monitoring was fruitful as it produced 3 more trading candidates, placed orders for all 3, making 6 outstanding orders in total. Will they get a fill or not? That's part of the system so no more action to take on that. My open Activision trade (long) was making a nice profit. More than the amount that I set as my stop loss so I put my stop above the break even point. Because that is my rule to add to my position I added another equally large position on Activision. Same stop loss as the other trade.

Last edited by DrSafari; Oct 6, 2015 at 4:32pm.
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