Ex hedge fund trader diary :)

[adrian247]

After trading 5 years for a quite successful hedge fund I'm back to trade just my own money.

 

[adrian247]

Focus trade:

The medium-term picture based on historical patterns adjusted to the recent price and volatility (red line) is bullish for silver (ETF: SLV / blue line). This is true for different look-back periods.

Now I am looking for promising long setups in the hourly chart. Already have a position from Friday.

 

[adrian247]

How I think about trading (I am the author of the blog)

Mindset:

https://vesrock.com/2019/03/08/always-think-in-probabilities/
https://vesrock.com/2019/03/08/impact-of-randomness/

Edge:

*
*
*

Risk management:

https://vesrock.com/2019/03/09/optimum-bet-size/
https://vesrock.com/2019/03/11/control-your-drawdown/

Will update this list on a frequent basis.

 

[adrian247]

Short-term bounce, but over the next 2 weeks or so rather lower.

 

[Panic!]

Interesting, look forward to following this journal. What made you leave the hedge fund?

 

[adrian247]

I do not think we are done with the short-term correction. Would like to see "fear" first. Afterwards, I am medium-term bullish.

 

[adrian247]

Just opened a short in ES @ 2770

 

[adrian247]

Most historical patterns support the view that there is probably a chance to make some money with shorts in the S&P500 over the next couple weeks.

However, price action has to confirm this thesis as always.

 

[adrian247]

Interesting, look forward to following this journal. What made you leave the hedge fund?

After 5 years I wanted something new. Now I trade just my own money which is quite relaxing. But it is possible I will start managing money for others again in the future. I just need a break.

 

[adrian247]

As long as we can stay below 2800 in the S&P500 I am slightly bearish. If we tomorrow fall below the low of today I will increase my short position.

 

[adrian247]

Silver is going well, increase my long yesterday. Above mentioned thesis regarding silver gets more and more confirmation.

 

[adrian247]

I wrote today an article about 5 steps to become an profitable trader:

https://vesrock.com/2019/03/12/how-to-start-trading/

 

[adrian247]

- S&P500 stopped out. Market is to strong, broke the structure of falling highs and falling lows in the hourly chart.
- Silver working well, took profit 1/3 of position.

 

[adrian247]

Solid thesis + good position management + right mindset = attractive long-term returns

What is your formula for trading/investing success?

 

[adrian247]

• Newest COT data still looking medium-term bullish for crude oil.
• Gold and silver: constructive. Nowhere near an extreme despite the good performance of gold. Pullbacks are rather buying opportunities.
• COT data in the dollar index confirms the above mentioned. Relative hedging was quite extreme in the second half of the year 2018. Price and position data shows some roll-over in progress.

 

[malaguti]

Solid thesis + good position management + right mindset = attractive long-term returns

What is your formula for trading/investing success?

Backtest, backtest, backtest. a fully backtested strategy for me takes care of everything else. the strategy will of course incorporate the allocation of funds and position sizing.but unless you can define what your entry/exit criteria is always going to be, without any subjectivity, i'd argue you are at the mercy of your mindset and you take profit too early, exit too late and then doubt starts creeping into everything you are doing

i like what you are doing however adrian, other than trying to short the s&p!

 

[adrian247]

Backtest, backtest, backtest. a fully backtested strategy for me takes care of everything else. the strategy will of course incorporate the allocation of funds and position sizing.but unless you can define what your entry/exit criteria is always going to be, without any subjectivity, i'd argue you are at the mercy of your mindset and you take profit too early, exit too late and then doubt starts creeping into everything you are doing

i like what you are doing however adrian, other than trying to short the s&p!

There are only two ways to make relatively consistent money in the markets. This is based on my experience working for hedge funds and also based on the track records from strategies and hedge funds (databases)

1. A very experienced trader has different strategies/tools and apply them properly to the recent market regime. This is what I do.
2. The second thing working: combine a lot of solide quant strategies (sharpe ratio > 1) which are uncorrelated. (for example: Millenium Asset Management)

There is not one single approach/strategy that works always good. Think for example on value and growth. We all know in the long run value should outperform. However, it is not that easy. Every factor and strategy goes trough the following cycle:

1. strategy works
2. people see that the strategy works
3. they try to also trade this strategy, lot of now players in the market
4. when everybody does the same, the alpha disapears
5. after couple years funds have outflows and shut down their funds
6. cycle repeats

 

[adrian247]

.

 

[adrian247]

• S&P500 (ETF: SPY / blue line) against forecast (magenta line).
• Algorithm is based on pattern recognition. (multi timeframe)
• The next 30 trading days are expected to be rather negative for the stock market.

 

[awe]

Got bored?