From paper to real money trading

[101116]

I have done some profitable 'gambling' in the recent years. Started with online poker a few years back and moved to sports last year. Both immediately started making profits but of course I have experienced many difficult drawbacks.
I was able to manage my bankroll during hard times and kept my head below the surface.

Last winter I first time heard of spread betting and started to grow interest and at the same time lost interest in poker. Since then I've been trying to learn basics of the market.
I first tried trading indices, then forex, but came to realize you need to be in and out of a trade so fast that all your profits are going to your broker in form of the spread. Also the execution wasn't fast enough. I guess it's called scalping.

Now I have started to only bother with equities. Spread is huge, some 20+ times that in indices or forex but I have found out that the way stocks trend suits me(my tools) better.

So I came up with a "trading system" and have been working on it for a couple of months.
Last month I made 48 papertrades of which 32 were profitable(66,67%). Average win being 2,37x average loss, totalling 3100ticks(another ~1k ticks paid in spread).
I do realize 48 trades isn't much and this kind of profit might be the best month I'll ever have but circumstances are that I'm going to have to take my shot now or get a job.

I'll be mixing paper and realmoney trades for now. Hopefully my streak goes on and I can start taking real trades on the larger stocks too.

I still have 3 winners(pretty big) running. I'll try to update my trades and stats here from now on.

GOOD LUCK :clover:

 

[Alexander0884]

What kind of timeframe do you use to trade with equities?

 

[101116]

At the moment I use hourly candles but I'm kinda planning on taking it up if I manage to run this.

 

[Alexander0884]

At the moment I use hourly candles but I'm kinda planning on taking it up if I manage to run this.

But in what way is it different? Is it less volatile?

 

[101116]

You need to place your stop further away with longer trades and it takes more capita. Still it needs to be long enough to beat the spread.

 

[101116]

Summary of trades last week. All papermoney.

LONG

EADS @ 30.39
Johnson and Johnson @ 68.55
Pernord Ricard @ 88.15
EADS @ 30.30
Vivendi @ 15.58
Cap Gemini @ 30.21
France Telecom @ 11.21
L'Oreal @ 100.7
RWE AG @ 33.17


CLOSED

Bayer @ 62.36 +123p (1,97%)
Deutche Telecom @ 9.22 +13p (1,41%)
Fresenius & CO @ 86 +1p (0,01%)
Lafarge @ 37.46 +76p (2,03%)
Legrand @ 26.65 +44p (1,65%)
Pernord Ricard @ 88.26 +70p (0,79%)
SAP AG @ 52.35 +62p (1,18%)
Fresenius Medical @ 57.92 -2p (-0,03%)
Technip SA @ 86.8 +130p (1,5%)
RWE AG @ 33.04 +165p (4,99%)
Muench Rueck @ 117.18 +256p (2,18%)
Safran @ 28.32 +72p (2,54%)
EADS @ 30.22 -17p (-0,56%)
Volkswagen @ 145.31 +722p (4,97%)
Johnson and Johnson @ 68.27 -28p (-0,41%)
Pernord Ricard @ 88.42 +27p (0,31%)
Renault @ 36.56 +169p (4,62%)


OPEN POSITIONS

Cap Gemini @ 30.21
EADS @ 30.30
France Telecom @ 11.21
L'Oreal @ 100.70
RWE AG @ 33.17
Vivendi @ 15.58


ALL TRADES

Closed: 54
Profitable: 36 (66,67%)
Total: 4019p (60,85%)
Reward/Risk: 2,82 (135,7/48,1)


I started to develop a strategy for bankroll management. So far I just traded the minimum size.
According to Kelly formula I would make the maximum profit by risking 48% of my bankroll per trade. That would be insane. I'm not just going for max profit but also low risk of ruin. Also my stats are not going to look like that after X trades. Third thing I have to consider is that I'm not going to make single trades, most of the time I'll have multiple open positions and I need margin for that.

I came up with using Kelly multiplier 0.1 (4.66% atm) and that is on required margin vs available margin.

Now I'm going to plan next weeks trades. What a great way to spend hangover.

 

[101116]

Planning trades is boring so I decided to introduce

The Trade Of The Week: Volkswagen 138.09 - 145.31 +722p (4,97%)

What a horrible exit. This one I had to exit with something I'd call emergency exit. It was going down very fast.

 

[101116]

Last week started out bad. I was trading wrong stocks and one of my exit strategies proved to be really bad. I needed to brainstorm.

In the end I managed to take my trading system to the next level and figured out some stuff to be watching that could help me in the future. Also started to take trades on 2H bars.
I'd call it a good week even tho I lost when I could've been winning.
Improving is more important at the moment.

I didn't take trades on real account for obvious reasons.

One more thing that bothered me a little was deciding not to take some trades that would've made nice profits.

 

[101116]

Summary of trades last week. All papermoney.

LONG

GDF Suez @ 19,41 S:5
Cap Gemini @ 30,18 S:3
L'Oreal @ 100,96 S:0,5
Johnson and Johnson @ 68,52 S:1
Cap Gemini @ 30,25 S:3
E.On AG @ 17,77 S:5
L'Oreal @ 101 S:0,5
Vallourec @ 36,82 S:2
RWE AG @ 32,85 S:2
L'Oreal @ 100,81 S:0,5
Vallourec @ 36,54 S:2
Lafarge @ 36,98 S:2
Siemens @ 73,98 S:1
IBM @ 199,07 S:0,5
Vallourec @ 36,54 S:2
Kraft Foods @ 40,74 S:2
Siemens @ 74,20 S:1
Kraft Foods @ 40,70 S:2
Johnson and Johnson @ 68,27 S:1
Fresenius Medical @ 57,79 S:1


CLOSED

EADS @ 30.48 S:10 +18p (0,59%)
L'Oreal @ 100,1 S:0,5 -60p (-0,60%)
Cap Gemini @ 30,03 S:3 -18p (-0,60%)
France Telecom @ 11,13 S:7 -8p (-0,72%)
RWE AG @ 33,24 S:3 +7p (0,21%)
Cap Gemini @ 29,96 S:3 -22p (-0,73%)
GDF Suez @ 19,42 S:5 +1p (0,05%)
L'Oreal @ 100,14 S:0,5 -82p (-0,82%)
Vivendi @ 15,69 S:6 +11p (0,70%)
L'Oreal @ 100,19 S:0,5 -81p (-0,81%)
Johnson and Johnson @ 68,49 S:1 -3p (-0,04%)
RWE AG @ 32,88 S:2 +3p (0,09%)
Cap Gemini @ 30,08 S:3 -17p (-0,57%)
L'Oreal @ 99,99 S:0,5 -82p (-0,82%)
Vallourec @ 36,19 S:2 -63p (-1,74%)
E.On AG @ 17,9 S:5 +13p (0,73%)
Lafarge @ 37,64 S:2 +66p (+1,75%)
IBM @ 198,06 S:0,5 -101p (-0,51%)
Siemens @ 73,75 S:1 -23p (-0,31%)
Kraft Foods @ 40,57 S:2 -17p (-0,42%)
Johnson and Johnson @ 68,09 -18p (-0,26%)
Fresenius Medical @ 57,43 S:1 -36p (-0,63%)
Kraft Foods @ 40,60 S:2 -10p (-0,25%)


OPEN POSITIONS

Siemens @ 74,2 S:1
Vallourec @ 39,18 S:2


ALL TRADES

Closed: 77
Profitable: 43 (55,84%)
Total: 3497p (55,15%)
Reward/Risk: 2,63 (116,3/44,3)

The risk on marginal vs marginal is now 4,7% -> 2,8%

 

[101116]

The Trade Of The Week: Lafarge 36,98 - 37,64 S:2 +66p (1,75%)

Another exit went bad. Could be a place for improvement.

 

[101116]

I'm playing around with excel trying to learn some charting. I'm trying to develop a method which lets me compare the performance of my filters I use for stock selection. This is going to take weeks of forward data.

So I came up with a graph of my trades so far. In order of trades taken(not closed) but that makes little difference.

If I was optimistic I'd say that after a while € will cross over P now that my avg size is more than 1.

 

[101116]

I'm going to take another shot at the indices. It's so much cheaper to trade and there's propably a trade to be made every day with 15min bars. Can't just let it go.

Just by eyeballing the charts I can tell that if my system for stocks is going to work so is this. Some finetuning needed for sure.

These trades I'm going to separate from stocks.

GL :clover:

 

[101116]

Trading the indices on 15M charts was a brainfart. No biggie but...

Very poor week to start taking real positions


CLOSED

LONG

PAPER

VK @ 38,61 +207 (5,36%)
SIE @ 74,81 +61 (0,82%)
FME @ 57,93 +5 (0,09%)
XOM @ 87,83 -13 (-0,15%)
CVX @ 112,61 +9 (0,08%)
KFT @ 41,03 +51 (1,24%)
LHA @ 9,93 -2 (-0,20%)
FP @ 39,77 -22 (-0,55%)
JNJ @ 67,54 -63 (-0,93%)
FP @ 39,68 -38 (-0,96%)
CVX @ 111,42 -68 (-0,61%)
AI @ 94,8 -66 (-0,70%)
FME @ 56,32 -32 (-0,57%)

REAL

EDF @ 16,41 -12 (-0,73%)
EDF @ 16,38 -17 (-1,04%)
VIV @ 15,63 -10 (-0,64%)
FTE @ 11,24 -8 (-0,71%)
VIV @ 15,59 -16 (-1,03%)
EDF @ 16,26 -24 (-1,48%)
VIV @ 15,56 -22 (-1,41%)
EDF @ 16,31 -9 (-0,55%)
VIV @ 15,66 -10 (-0,64%)
FTE @ 11,18 -8 (-0,72%)
LHA @ 9,77 -7 (-0,72%)

DAX @ 7028,7 -10,1 (-0,14%)
DJI @ 13196 -13 (-0,10%)
CAC @ 3477 -11,5 (-0,33%)
CAC @ 3474,3 -12 (-0,35%)
DAX @ 7015,7 -19,6 (-0,28%)
DAX @ 7051,5 +29,5 (0,42%)
CAC @ 3474 +3,5 (+0,10%)
DJI @ 13167 +13 (+0,10%)
CAC @ 3460 -13,3 (-0,38%)


ALL STOCKS

Closed: 104
Profitable: 48 (46,15%)
Total: 3233p (45,98%)
Reward/Risk: 2,65 (111,2/37,6)


Luckily I have made a mistake when counting my risk. It should have been higher.
2,8% -> 2,3%

 

[101116]

The Trade Of The Week: Vallourec 36,54 - 38,61 +207 (5,36%)

Edit

Some of the trades on the attached graph are not closed yet so they count as 0.

 

[101116]

Another troublesome week. Had several gaps angainst me and my overall view wasn't correct. I'm also starting to doubt wether it's possible to beat the spread on the small/european stocks.

Now I'm first time in a position where I think I should be trading some timeframes up and some down on the same instruments. I was planning that when this happens I'm not going to trade.

But I will. Only papertrades tho...


CLOSED

LONG

PAPER

XOM @ 87,65 +28 (0,32%)
CVX @ 111,73 +8 (0,07%)
VK @ 37,62 -10 (-0,27%)
RWE @ 32,89 +42 (1,28)
FP @ 39,24 -18 (-0,46%)
FME @ 56,05 -64 (-1,14%)
SIE @ 74,99 +55 (0,73%)
VK @ 37,38 -35 (-0,94%)
JNJ @ 67,12 -51 (-0,76%)
FP @ 39,37 +3 (0,08%)
VK @ 36,27 -39 (-1,08%)
FME @ 56,98 +23 (0,40%)

DJI @ 13153 +18 (0,14%)

REAL

VIV @ 15,53 -8 (-0,52%)
LHA @ 9,75 -11 (-1,13%)
FTE @ 11,27 -1 (-0,09%)
VIV @ 15,52 -13 (-0,84%)
VIV @ 15,16 -44 (-2,90%)
LHA @ 9,71 -6 (-0,62%)
FTE @ 10,98 -5 (-0,46%)
LHA @ 9,63 -9 (-0,93%)
FTE @ 11,04 -13 (-1,18%)
LHA @ 9,63 -9 (-0,93%)
UTX @ 79,59 +53 (0,67%)

CAC @ 3445 +16,5 (0,48%)
DAX @ 6994 +51,7 (0,74%)


ALL STOCKS

Closed: 127
Profitable: 55 (43,31%)
Total: 3109p (35,30%)
Reward/Risk: 2,98 (100,9/33,9)


I'm unsure if I should count my R/R by points, euros or percentage. All flawed in their own way. Last time I did euros but I used wrong numbers on the post. This time I'm going back to points.
Also I did poor job following the risk per trade. Need to improve.
2,3% -> 2,1%

 

[101116]

The Trade Of The Week: Siemens 74,44 - 74,99 +55 (0,73%)

Some of the trades on the attached graph are not closed yet so they count as 0.

 

[101116]

I was sick all week and still am somewhat. So I had time to think.

I have been trying to get to higher timeframes building up from 1H. What happens is I'm going to quit trading intraday swings and build to more position-like trading. It would be some kind of a hybrid I guess.
Now stop.

Why would I do that? To try to get benefits from both styles and to make trading more comfortable to me personally.

But why not separate those styles and go for positions and swings?


And so I spent hours trying to figure out what the **** am I doing.
In the end I came up with a set of rules for positions and swings that both originate from the same basic strategy.

Also I figured new filters and I'm going to follow the performance of those. So I don't end up doing a lot of work and in the end just trade randomly.



I missed the big move last week, too bad. I was even going against it on demo. As I said last week I wouldn't have known what to do this week(I always decide beforehand what instruments I'm trading next week and in which direction) so I just went both ways on demo account on a couple of trades.

When you're doing things feverish you don't want to find yourself thinking; "Oh, this was the real money account, eh?"

Ended up trading 1sec bars randomly on real account.(index) -20p
Ended up taking short 1 short position on real account. Still open and hopefully doesn't gap against me hard.



So, I did hopefully improve my trading style. New add-on is position holding. I'm going to start positions at first chance on monday - make new analysis on weekend - start/stop at first chance on monday....
- Where do I place my stoploss?
- Will I pyramide?

I'm not 100% sure but forward testing a demo account I dont have to.

 

[101116]

In short trades the percentage is inverted.


CLOSED

LONG

PAPER

VK +44 (1,19%)
XOM +12 (0,14%)
GSZ -26 (-1,35%)
LHA -13 (-1,36%)

DJI -19 (-0,15%)

REAL

GSZ +8 (0,41%)
FTE +5 (0,45%)


SHORT

PAPER

CAP -3 (-0,10%)
INTC +21 (+0,85%)
CAP -14 (-0,47%)
VZ -48 (-1,10%)
BA -39 (-0,54%)


ALL STOCKS

Closed: 139
Profitable: 61 (43,88%)
Total: 3090p (35,61%)
Reward/Risk: 2,81 (93/33,1)


I just took min positions this week. Now I'm trying to use the damn risk that I think I should. Which is still 2,1%

 

[101116]

Now that I switched to what I call 'position' and 'swing' trading what happens is I'm mostly taking positions in current market condition. Only a handful of my watchlist is good for swings right now. This is going to change at some point. Atleast I think it should.

There's nothing to think about. Only forward testing and watching filter performance. And only a few swings to trade.
So I want more action and start thinking about FX/commodities and how to trade those. Answer seems to be 'naked' trading using only S/R levels.

But I tried that already and came to the conclusion that it's not going to be profitable for me. I lose the same as I pay in spread.
Well, I tried it in the 1minute or so timeframe. It can also be done in higher timeframes.

And here we go with 3rd different method of trading before the first 2 are even close to be proven.
Doesn't matter. I'll just trade them all for now and make more decisions when it's time to trade for real.

For now I only take real trades on swings as it's still profitable to this day.
in the first post I said something about taking a shot at this with my gambling bankroll but things have changed. I keep taking money out of the roll for other things and I have only made a moderate deposit. I will keep it this way and start adding small amounts when I think it's time for it.

 

[101116]

Closed positions last week.


SWING

SHORT CAP -37 (1,17%)
LONG CSCO -22 (1,16%) R (I keep making this same damn mistake and it keeps punishing me. I adjust stop but forget to count in the spread. Then the stock comes to the exact pip STOP+SPREAD[3 in this case] and starts a big move up. COUNT THE ****ING SPREAD IN TO THE STOP, THANK YOU!)


POSITION

LONG KFT -89 (-2,24%)


NAKED

LONG AUD/USD +32,3 (0,30%)
LONG EUR/CAD +77 (0,61%)


ALL SWINGS (Counted in the indices)

Closed: 156
Profitable: 67 (42,95%)
Total: 3047,7p (32,82%)
Reward/Risk: 1,94 (1,56/0,8)


Now I have again changed my mind on how to count the risk. This time I went for the % on % (of the instrument). I think it's going to be the smoothest. Maximum risk I could take(and would be the most profitable) is 13,54% but because of everything I use a pussy multiplier which makes it 1,3%.

I'm using 2% for position and naked trading untill I have enough data to calculate.