Equity curve of my day trading system.

[Rupert206]

Hello All,

Ive been trading for 7 years now, mostly swing trading. I tried day trading via spreadbets in 2006 when the market was dropping like stone. Made easy money on the way down thinking it was simple, but then lost it all back and then some until i finally decided to stop as my loosing streak was getting out of control.

Anyways the system I was using back then was the system I am still using today. Im trading the DOW in the evenings only btw. Simple system of identifying flags/pennants/ranges and entering sometimes agressively with a position in the direction of the prevailing daily trend. Will post some charts later to show the setups im taking.

Anyways have been day trading the dow on a daily basis since June. Ive attached my equity curve.

I would like others who also day trade to post their equity curve. I want to see what kind of drawdowns you are experiencing and the rate of ascent.

My first drawdown was 64% which I must admit is pretty high. However this was due to a very bad run which I was mostly to blame for as my system should have been adjusted to accomadate for the choppy conditions of August and early October, and also for not reducing position size when things were turning sour.

The equity curve has been plotted with 5 months of real data, which is my daily profit or loss.

Apparantly 95% of day traders lose in the long run. So im assuming 5 months of data does not prove that I will continue to be able to day trade over the long term. How much data is required before you are no longer in the short term box and in the long term 5% that win box?

BTW I use no indictors and no volume. Just pure unadulterated price action only and a bit of the all important SME added into the mix. For some reason I have yet to come across anyone that trades like this with a day trading system. They all use some kind of system which involves indictors..Which to this date I still find baffling...?

 

[Rupert206]

So no one here day trades or keeps an equity curve that we can compare notes on?

 

[westernforce]

Just as a question Rupert, how did your balance increase from zero with zero to trade with? What was your initial stake?

 

[Rupert206]

Started with 10K

 

[westernforce]

To double 10K in 2 months is not too shabby. Your current equity trend since the middle of last month is impressive, keep it up.

 

[Chorlton]

Hello All,

Ive been trading for 7 years now, mostly swing trading. I tried day trading via spreadbets in 2006 when the market was dropping like stone. Made easy money on the way down thinking it was simple, but then lost it all back and then some until i finally decided to stop as my loosing streak was getting out of control.

Anyways the system I was using back then was the system I am still using today. Im trading the DOW in the evenings only btw. Simple system of identifying flags/pennants/ranges and entering sometimes agressively with a position in the direction of the prevailing daily trend. Will post some charts later to show the setups im taking.

Anyways have been day trading the dow on a daily basis since June. Ive attached my equity curve.

I would like others who also day trade to post their equity curve. I want to see what kind of drawdowns you are experiencing and the rate of ascent.

My first drawdown was 64% which I must admit is pretty high. However this was due to a very bad run which I was mostly to blame for as my system should have been adjusted to accomadate for the choppy conditions of August and early October, and also for not reducing position size when things were turning sour.

The equity curve has been plotted with 5 months of real data, which is my daily profit or loss.

Apparantly 95% of day traders lose in the long run. So im assuming 5 months of data does not prove that I will continue to be able to day trade over the long term. How much data is required before you are no longer in the short term box and in the long term 5% that win box?

BTW I use no indictors and no volume. Just pure unadulterated price action only and a bit of the all important SME added into the mix. For some reason I have yet to come across anyone that trades like this with a day trading system. They all use some kind of system which involves indictors..Which to this date I still find baffling...?

Out of interest, given the high DD between Aug and Oct, what gave you the confidence to continue trading through it with your system ?

 

[shadowninja]

I got very confused there. I recognised the design of that graph but thought, "****, my spreadsheet has got a virus." cos the numbers were all wrong. I'd forgotten my spreadsheet was public domain now.

 

[Rupert206]

I got very confused there. I recognised the design of that graph but thought, "****, my spreadsheet has got a virus." cos the numbers were all wrong. I'd forgotten my spreadsheet was public domain now.

Ha! yes I know i had downloaded it from t2w sometime ago..but didnt know who had created it. Now that you mention it, I guess it was you..Thanks very much for it...does the job great...Looked around everywhere for one and eventually found your post where you attached one. Cheers.

 

[Rupert206]

I know the causes of the drawdown. Ive always believed 100% in the system (well I call it a system, but I dont think it is one, its just a simple way to trade) and that is why since the draw down ended I have traded it alot more agressively.

I have acquired new market knowledge during that drawdown period. That is the ability to identify choppiness and still be able to use chart patterns to trade it. All it requires is faster exits, and not holding out for the full target.

Friday was a prime example of a choppy day on the dow. My DD period was mainly due to not being able to effectvely trade chopiness. The reason for the severity of the drawdown was that position size didnt come down fast enough, I was still trading aggressively. But ive adjusted to that now and can manage positions accordingly and either let them running (trending market) on cut them shorter (Chop)

 

[Bolimomo]

Rupert:

I believe what you were referring to is what's called P&L (Profit And Loss) diagram and not an equity curve. An equity curve is your account balance over time.

I do stock/futures trading for a living. Enclosed are mine for the H2 2008. When you trade for a living, it is important that you have consistent gains. The key is "consistent". You cannot avoid occassional drawdowns. Some drawdowns may be big, or even huge. But if you keep having a series of drawdowns, you must STOP first. EVALUATE. Either your methods are not right. Or the markets are not right for your style of trading. You must nail down the root cause. It happened to me several times in my own evolution. Now that I am at a point that I do take occassional drawdowns (those downward spikes). But they are not enough to stop me going forward.

I mentioned in another thread: This market from September through now November may seem volatile, or at times chaotic, to some people. But no trader who worths his/her salt will back away from this market. Volatility is our friend. Ride it wisely. I had made more money in the month of September than all the months from January through August combined. And I made in October twice what I made in September. November is still pretty good so far. I expect December to slow down. Most of this result: thanks for the market down-runs which created lots of opportunities. We can't ask the market to give us this kind of environment every month. So take what you can while it lasts.

I have removed the scale to protect the innocent.

P&L diagram:



Accumulative P&L curve: