Tullibody's Blog

Tullibody typhoon hits the markets

I've won and lost tens of thousands mainly on shares and futures in the course of hundreds of trades. Spread betting and fixed odds have been less spectacular but like the rest have suffered from wayward discipline. This warts and all journal is intended to counter that for me and maybe provide a bit of enlightenment/entertainment for any readers.
Some methodology: I was impressed by a visit to Chinese Numbers' site despite the idea being much pooh-poohed here. Then in traders' magazine an article by Uwe Wagner presented a simple formula for calculating entry levels (in the Eurostoxx 50) using previous day's close high/lows. It looks promising across DJI, S&P, Footsie and Dax plus cable, Swiss, yen and eurofx basis following it for a few weeks.
So the plan is hit the entries, grab any profit going if the market fails to get beyond 10, use advancing protective stop losses above that and limit losses to 10 points.
I am using deal4free' s updated software which looks excellent, no level 2 feeds, fabulous charting software or separate news monitors.
The idea is to make money as fast as possible; specifically if I increase capital by 50 percent, I'll put in another 50 percent; if I drop 50 percent, good bye.
'til the morrow.

Hi Tullibody

If your refering to the article in traders mag which I think your thinking of then BE VERY CAREFUL. Have a look at this thread and you'll see what I mean. http://eurostoxx50.co.uk/cgi-bin/yabb/YaBB.pl?board=Strategies;action=display;num=1048510350


Either way, happy trading

Tks for the tip, FTSE Beater. Read the thread but no comprendo save backing up ultra caution stance; far as my plan goes, ya can forget about 3 pct stop loss levels ; I'm budgeting for 1-1.5 pct of capital per punt, no ego trips and a fast trigger finger.

Hi Tullibody

What FTSE Beater was referring to is that Uwe Wagner's article in Traders' Magazine has errors in it. The analysis of Wagner's system is posted by "Dippers" later in the thread. If you saw this, I apologize but thought if you hadn't you may want to read about the problems with the system.

Regards,

Austin

Yeah Austin (and tks for outpoint) I did read Dipper's comments. I didn't take Herrn Wagner's ideas nearly as litererally as Dipper has done, just the basic way of setting up the entry points. My testing which lacks any mathematical or intellectual finesse simply showed that across the eight markets I mentioned there were plenty of hits and by holding losses to 10-15 points and protected profits, you might have a chance.

April 22- - all aboard!

First day was a bit of a mess really. First didn't get started in time to get on the morning trades which were Cable three times short @1.5720 (theoretically flat, flat and + about 50); swiss short @1.3809 (+45), euro long @ 1.0904 (+40), Dax short @ 2848(flat) and yen short @ 119.95 (+12). The last couple I was all tangled up in the d4f new software (see above) and missed the levels. These were not profits from the highs but based on trailing stops ratcheting up as 10s and 5s are reached.
Once I did get involved PM fresh fallibilities emerged to wit...
flat on the Dax short at 2848 then lost 12 on Dow short at 8287; made 11 on the Dow same entry. The S&P though was too fast for me and I missed an entry (short at 886.9) but went in any way to lose 20; same entry after a pullback lost 30 -- so damn fast -- then long the S&P in the rally at 897.1 lost 18 (should have been 15 like the other S&P losses) then made 10 when fresh squeeze stalled at +11 came back and then went to about +40. ended up by sitting for too long on the DoJo getting in at 8370 in time to see it reverse costing 20 because I was too slow. That was enough. Net loss 79 points of which 40+ would have been saved if I hadn't clutched at taking losses at 10-15 points and stayed out when the S&P entry point had already gone. Sound familiar?

April 23

The only market to hit a stop during my trading time was dollar-yen which went long twice at 120.56 the first time going into a profit max about six before weakening to allow a get-out at level. The subsequent rally took it through the stop again (I missed it and bought three over) but this time it weaken and I took a loss of 12. At least I hit the button without a loss on the first trade. Not easy when you want to be right, arguably haven't been proved conclusively wrong and there is nothing magical about the entry level -- apart it being the point at which you beginning to lose money.

April 24

Got out level from long cable after a rally ran out of steam coupla points above my buy stop. A bit later there was a sweat on the Dax which from 2940 short gained about five points before squeezing up. Basis not turning a profit into a loss I baled when it got back up to the sell stop and got a single point profit. Still trying to figure a way of getting back in again when a market as this one did turns positive again. Bit of TA perhaps. Anyway it weakened and a profit of 15-20 might have been there.
Instead I got taken into the Footsie short at 3928 (circa 1400) to watch it crawl a few points up and down before it finally showed gains around the Dow opening. For no good reason I took five points (ennui probably) before it fell further and 10 would have been available. Shutdown after that feeling a little more comfortable with things than before and beginning to see some of the questions if not the answers.

April 25

After two days of very few hits, several stops came up today with mixed results. Also came up with a few answers to looming questions -- for instance I'll scratch a position when the market goes against it by the width of the spread. Ergo losses on d4f will be between six and 10. Of course that is easier said than done and a couple of times I sat frozen while that level was passed. The experience is that the market doesn't come back, or not within a range which is comfortable. At least with a six-10 point loss there is a chance of recovering. Does any clever person have loss level where it is proved that 50+ percent of the time losses will get worse? Also found several entry stops short or long acted more like reversal points which was discouraging.
Anyway several stops were hit. Made and lost a profit on the Dow then eventually took a profit when it came back to the sell stop. Instead of going back into the Dow short, I sold the Dax which sat with a minor loss before letting me out level (then fell for a profit of course). When I lost my Dow profit I was also short the S&P which reversed to lose very quickly and causing both the Dow loss too. Just too fast for me.
This has been a pretty dispiriting week but the fight continues on Monday. Good weekend.

Having used Deal4free for about 18 months, I don't think having such a tight stop on the Dow will work. I find their price fluctuates too much for a fixed stop so I have to watch the screen if I am in a short term trade. I noticed when trading the FTSE that their charts don't plot all the data, so it is possible to get stopped out when it doesn't look possible on the chart.

Might be worth paper trading for a while to test your system. The small losses add up quickly.

I found this website useful:- http://212.38.89.86/spreads/

Hi,

Have you thought about trying a less jumpy index than the Dow? Look at the Eurostoxx50 on D4F, it's a much smoother moving index than the dow but you'll still need a 10-15 initial stop.

Thank you both for your thoughts -- much appreciated. IMHO the S&P is fit only for traders with lightning reflexes.
Helenqu re the eurostoxx50 -- this is a spreadbet on a futures contract, right? where can I get the close/hi/lo details for it please, or do I just have to look at previous day's chart? Grateful for your input. chs both.

You can SB or futures trade it. Both D4F and Fins offer it.

More info look at my website:

www.Eurostoxx50.co.uk

Also Eurex website:

www.eurexchange.com

April 28

Due d4f downtime plus yoga class, no business was done yesteday . Somehow this didn't make it to the journal.

April 30

(This is my second attempt at updating today so apols if two versions suddenly appear)
Due to various circumstances including a powercut, no trading was done on Tuesday but I did think a lot on the advice readers have kindly provided. Clearly I'm not up to BS'ing the S&P and Dow based on the system's entry signals and my tight stop losses. In fact probably no body is! Suspect it needs much wider stop losses than I am willing to finance and/or confirmations from old friends like RSI and fast stochastics.
To that end I tooled the d4f marketmaker charts up with both these studies whereupon the computer crashed. Once back, the cable had shot to a fresh high -- unconfirmed by both fast stochs and RSI -- albeit about four points short of the long buy stop. So I shorted and about 10 minutes later booked 28 points.
Off from a preen before the power goes again.

hi, nice entries good to se someone prepared to put it on the line and write a journal, have been tempted myself to put mine online as i keep a diary anyway.. sidetracked a bit.

A reason for your comp crashing could be that D4F has been having a lot of problems with there charting software that has been causing these problems, so if you can i would try and avoid them if pos. Just got Sierra charts and mytrack data set up and so far it seems very stable, not sure how reliable the data is yet but a lot of ppl on here rely and trus them a lot

hope this helps, happy trading

Tks for thoughts, Mr/Ms Bomb. I'll outcheck.

I agree that you can't have tight stop losses SBing on the Dow.
Consider- you need 50 point stop loss on the Dow to keep you in on the pull backs, on IG index which I have used the min is £2 a point thats £100 for you to try and gain- say 200 Points, and that would be a good day, is that a good bet!!
Bill

May 2

As Europe was on hols yesterday, after I had done my sums, I decided not to trade. Returning a few hours later, with markets going through stops based on Herr Wagner's system right, left and centre, I felt fairly p.o.-ed about that decision. No matter, further thought was given to using fast stochastics and RSI to confirm entries and a few loose ends tied up and some hindsight-type referrals to Thursday's market's confirmed several good trades.
Friday morning got confirmation to go long the eurofx at about 1.1216. Taken, and market crawled about as equities declined so I eventually took a tick and scratched. it would only have been good for about five but shortly after I missed the signal when eurofx fell to about 06 which would have booked about 10-15.
Trading ended there as electrician came for checks following powercut and it took hours to restore internet connection. PM, the net and/or d4f was painfully slow so nowt done. While down though, there was a perfect buy signal for the Swiss which had gained about 60 points by reconnection time. Hey ho.
After last week's horrors, I'm a lot more comfortable now with my system to play reversals than I was with the mechanical plays based on the Traders' article. Pre the electrician's intervention today, the practicalities using charts and alerts were working fine. I have also abandoned any thought of touching the S&P and the Dow for now.
Producing these notes has gone a long way to making me think about what I am doing and the advice added by site members has been valued and acted upon. Thanks to all.
Til Monday or is it Tuesday? Keep the faith.

May 5-6

Suddenly I can't read a chart or spot a divergence. Typically went long the FTSE on Tuesday; scratched for a tick as the market came rebounding back and ditto with a short trade on the cable. Both trades showed only about four ticks profit at their best, hardly a full-blooded reversal.
Sadly took a dodgy mixed signal on the Swiss to go long and paid for it as market continued to fall. Later another long on the Swiss when it DID seem to be reversing but after much flaffing about it let me out flat and I went off muttering to an appointment 15 out of pocket.
May 6 was a good deal worse. Somehow or another I could not accept that markets were either in nasty little ranges or trending halfheartedly to nowhere in particular. Consequently sundry silly trades took place only a couple of which were remotely supported by stochastics or for that matter, plots. Lost 15 on a stupid short Swiss when it bounced off 1.3300. In fact it was me that was stupid. Totally focused on the figures I didn't notice that the rebound had reached a nearby double top which was exactly where I jumped. The double top did its job and a healthy profit would have followed.
Lost five on the yen, made 11 on the Foots; then got whooshed out of a long Dax to lose 15 and in the afternoon when the Americans were doing their headless chicken act (assuming it is an act), made five long on the Dax before it went scooting back with the D-Jo (renamed by me after Miss Lopez's most prominent dimension).
In between the cable and the eurostoxx did show reversal signals but I was off duty.....
Keep the faith.