Breakouts

Chad Seven

Active member
207 13
May 2020 Review (Balance: £27,967.20 , P/L: +£3,962.12 / +17%)

Looks like no trades for me today so I shall get the monthly review out of the way before the weekend.

Summary
  • Good month with +17%. That being said plenty of room for improvement
  • With new balance risk percentage is now 3.6%.
  • Notable that all my profits came from oil and derived markets.
  • No repeat of last month's infraction whereby I widened my stop on a live trade.
  • Confusion and doubts that arose following DAX trade which was up £2,200 and closed for BE have been largely resolved and I feel more comfortable with my plan with regards to exits at significant resistance levels.
  • Should not have taken Ripple trade and have removed from my watch-list. Too volatile and spreads too wide. I shall be doing more due diligence prior to adding any future potential markets.
  • Missed a rocket of a silver move and I don't know why or how to ensure this does not happen in future.
  • Took a gold trade right into strong multi-week resistance which got stopped out for loss. Have added an item to my checklist to check daily TF.
  • Closed big US Crude trade too early where there was no reason to except that I could no longer sit on my hands.
  • ~20 trades suggests over-trading. Will start to forgo more trades where there is strong resistance between entry and target area. I may even stop trading forex, we don't seem to get along.
  • 35% win rate from IG stats is not accurate. This includes trades which were closed for a few £ loss which I would count as a scratch. Have made a start on my database but got distracted from it's core purpose by prospect of downloading data real time via IG API.
  • Still looking into options and how they can enhance my strategy.
IG Stats

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Chad Seven

Active member
207 13
Output from first version of results database. It amalgamates trades with the same opening ref and different closing refs (broker analytics count these as separate trades) and counts trades greater than -100 and less than 100 as a scratch.

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Last edited:

Chad Seven

Active member
207 13
Output from first version of results database. It amalgamates trades with the same opening ref and different closing refs (broker analytics count these as separate trades) and counts trades greater than -100 and less than 100 as a scratch.

View attachment 280837

These are consolidated results:

1591039213663.png


I am upset that the Gasoline mistake will show up in the lossMax column forever.
 

Chad Seven

Active member
207 13
Currently long Investec. I don't ussually trade equities. I have been looking into adapting this strategy to trade for my ISA and came across this, it was too good to pass up on my spreadbetting account.

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Chad Seven

Active member
207 13
I don't plan on trading the next two days so here are the results for June, and I have to say I am not happy.
  • Missed a good trade on AUD/USD
  • Made a mess of my exit on the Heating Oil trade and exited too early due to a problem with my calculations
  • Won't be trading stocks anymore on this account
  • A lot less trades this month. Partially due to me being more picky about the trades I take, but also there were few opportunities
  • There was a situation where my P/L for the month was £1,300 and I was long Wheat. If the wheat trade had won I would be up £3,300, happy days, if I lost I would be down to £300, not good. One trade makes all the difference. I lost.
  • Forex continues to disappoint.
  • Barely made a profit for the month with +£317.14
  • Not happy, quite despondent actually.
That's about it.

Monthly Summary:
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Monthly Market breakdown
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Overall Summary
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Overall Market Breakdown
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Chad Seven

Active member
207 13
The "discretionary" nature of my approach is really taking it's toll psychologically. On the other hand I don't believe that a system which can be reduced to a simple set of unambiguous rules can be profitable, if it could, everybody would be relaxing on the beach as their trading algorithms extract money from the the market like an ATM machine.

That being said I need to be more formulaic in my approach, and the biggest area of uncertainty is what constitutes sufficiently strong resistance to avoid a trade. I am thinking perhaps a ranking system based on number touches and whether the level has acted as a "pivot price zone".
 

vaughanv

Active member
165 40
Chad Seven, I applaud your dedication to keep posting here. Such a character trait is valuable as a trader. I think you deserve some input that might (or might not) help you on your quest. It comes in the way of questions and insights. Make of them what you will.

1) What is your ultimate objective? As you've discovered this lark can be stressful. Do you have it in you to be glued to a screen all day? If not, what's your plan?
2) Trading is a 3-legged chair: Method, Money and Mind. Your Method is a work in progress. Your Money is ok-ish. Your Mind is embryonic. You seem determined, so keep going. If you're serious and humble, you'll learn quicker than most. Mind is the most difficult aspect of trading to master. Most men trade their egos, that's why women make better traders because they trade their fears.
3) Your Method: Has makings of Entry, but you don't seem to have Exit criteria/plan and your trade management is letting you down. You learn more from your losses than successes, so go back and study them.
4) Exit is subjective, so your trade management needs most attention. In my experience a good trailing stop set an appropriate distance from price allows to stay with a trend if you've caught one (thus flying past possible target price). It also keeps you in a trade when your Mind starts to sabotage you. It also reduces (never negates) that annoyance of a profit turning into a breakeven or loss.
5) You need to see each market as an individual personality and some of them are schizo. You need to know why. For example, if you enter a US index trade a day before NFP how will that market perform in the 24 hours before the numbers come out compared to the rest of the week? Do you even use an economic calendar?

Just some food for thought.

Me.
 
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Chad Seven

Active member
207 13
Chad Seven, I applaud your dedication to keep posting here. Such a character trait is valuable as a trader. I think you deserve some input that might (or might not) help you on your quest. It comes in the way of questions and insights. Make of them what you will.

Thanks.

1) What is your ultimate objective? As you've discovered this lark can be stressful. Do you have it in you to be glued to a screen all day? If not, what's your plan?
2) Trading is a 3-legged chair: Method, Money and Mind. Your Method is a work in progress. Your Money is ok-ish. Your Mind is embryonic. You seem determined, so keep going. If you're serious and humble, you'll learn quicker than most. Mind is the most difficult aspect of trading to master. Most men trade their egos, that's why women make better traders because they trade their fears.
3) Your Method: Has makings of Entry, but you don't seem to have Exit criteria/plan and your trade management is letting you down. You learn more from your losses than successes, so go back and study them.
4) Exit is subjective, so your trade management needs most attention. In my experience a good trailing stop set an appropriate distance from price allows to stay with a trend if you've caught one (thus flying past possible target price). It also keeps you in a trade when your Mind starts to sabotage you. It also reduces (never negates) that annoyance of a profit turning into a breakeven or loss.
5) You need to see each market as an individual personality and some of them are schizo. You need to know why. For example, if you enter a US index trade a day before NFP how will that market perform in the 24 hours before the numbers come out compared to the rest of the week? Do you even use an economic calendar?

Just some food for thought.

Me.

Your comments is very much appreciated at this time, thank you.

1. It would be great to trade for a living. I would enjoy being my own boss and being in full control of how I work. I also am aware that with the job market is getting more and more challenging with automation and offshoring (I am looking for work after being made redundant a few months ago, I have sufficient money to support myself and trade) self employment may become my only option one day.

I am OK with being glued to screen, I have spent my career so far glued to a screen. Is that what I would like to do with my life? No, but I find myself limited by certain constraints and certain options are available or not available to me and I need to play to the cards I have been dealt.

2. " Your Method is a work in progress. Your Money is ok-ish. Your Mind is embryonic". -- Literal laugh out loud moment. Thanks for your honest assessment. I have really been surprised by the mental aspect, if I pay attention to my mind as I make trading related decisions there is so much going on and I am impacted by factors such as was my last trade a win or a loss, how much time left until the end of the month when I do my stats, things I have heard on the news, doubts, biases of various kinds. I make records of my thoughts and I look for patterns so eventually I hope with experience I will be promoted from mental embryo to fetus.

3. I thought I had the trade management all figured out but I go from one trade looking at the chart and just "knowing", to the next looking at the chart and drawing a blank, like all the experience I had built up was worthless and I look at my notes and am not being able to apply them to the situation. So yes, something is wrong. I keep detailed records of every trade, my reasons for entry, exit and any adjustments I make and what is going through my head, so again I hope to progress here through experience and hard work.

Oh I study my losses. I review my trade records every night and the whole weeks trades Sunday.

4. When you say the exit is subjective I assume you are referring specifically to my approach. I tried to make it as objective as possible by setting target at distance of triangle height but I noticed (and was surprised) that the move is often not powerful enough to break through resistance levels obstructing my path and taking these into account has really made the exits subjective, yes, and it is something I am still not comfortable with. I like your trailing stop idea, it's something I shall need to think about and do some testing of.

5. No I don't follow the market specific news as I believe "everything is in the price". I do look at the news when analyzing losses and I haven't found that following the news would have changed much. That being said this is something I shall consider.

I hear you regarding market characteristics. I believe my approach should work on all markets (he says as he is looking at a 0% win rate on forex) but I should be aware of idiosyncrasies of each market and I do take notes when I notice something about a market. One of the items on my pretrade checklist is to review notes I have taken regarding the particular market being traded.

Thank you again for your comments. I probably have not come across very humble. I feel now like I am on the right track but also slightly daunted by how much work I have to do.
 

Chad Seven

Active member
207 13
I have been doing some thinking.

There are broadly three outcomes when my trades get executed:

1. trade gets executed and a significant move results
2. trade gets executed, retraces and stops me out, then a significant move results
3. trade gets executed, retraces and stop me out and the price does not recover.

I can eliminate the getting stopped out factor in scenario #2 by trading options. One of the challenges to this approach is my "broker" only offer options on a subset of the markets I trade.

If I chose to pursue this I could change broker, perhaps to a proper options broker. Another 'option' is to start trading stocks for which my broker offers options, although these are negotiated over the phone. Trading stocks would also have the advantage of a larger universe of instruments and I would be able to focus on setups on higher time-frames.
 
 
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