My First Paper Trade--Long Long-Term Turtle, No Pyramiding

[Daddybyday]

Hello, All,

I'm excited! As I was looking at my ETF trading universe I noted that several of them were close to having buy singals, and one actually had a signal. I'll post the chart, and then talk about the trade. Here is Friday's daily chart for IVV:

First, the entries and exits:

1) Buy on a 55-day breakout (As I'm only looking at charts in the evening, I'm modifying this to buying when the instrument closes above the 20-day high).
2) Exit the position at the 20-day low.

The turtles added pyramiding into this strategy, but I haven't worked that part out yet, so I'm going to do this one straight.

First, the layout of the chart. The vertical lines are set at the 10, 20 and 55 day marks, just to help me keep track! In this case, the green resistance line is clearly a new 55-day high high, so I'll initiate a "paper" position on Monday at the open. As for the position sizing, I'm going to pretend that this is a real position, so based on my risk tolerance (see my "money management" thread), I'm going to initiate a 3-share postion (I'm doing this one as "real" as possible). Were I to be doing pyramiding on this, I would open with 1 share, and then I could add up to 2 more shares within my rules as the position moved up (assuming, of course, that it does).

On the other side, the red support line (it should be at 274.10) will be my initial stop loss for the trade.

I'll add to this trade throughout, so I'll be back on Monday with the opening trade results.

Does anyone know of a good site to do paper trading? The spreadsheet works, but is a bit boring ;-)

I'll post on Monday.

Tom

 

[Panic!]

Interactive Brokers allows you to papertrade for free.

Also, did you backtest this? I ran a quick backtest just now and for me it doesn't seem to work.

I used your entry and exit criteria, and ran it with just that. This gave me abysmal returns, so I added another criteria where you would take profit if the price went up the same distance between your entry and exit.

I don't have historical bid/ask data, so I just added 0.01 to the price per transaction and assumed you're paying 5 usd in commission.

 

[NVP]

these systems generally depend on a few big runners to fund the losers......if you miss them then it gets very messy......many turtles did not stay on as they couldn’t hack the dynamics

 

[Daddybyday]

Hello, NVP and Panic,

First, Panic, Thank you for mentioning "Interactive Brokers." I've been rethinking a lot since I wrote this original post on Saturday, and am rethinking using a turtle-like strategy. That is why I'm here--to get feedback and rethink and fine tune. I'm going to go with this paper trade, but may not go further with this strategy. I don't have back-testing capability, but I've heard from a few people that back-tests if these criteria on my symbols are not encouraging. More thoughts to come.

Thanks, both of you!

Tom

 

[tomorton]

Good luck Tom, but without pyramiding I fear this strategy will give mediocre results,like similar approaches have for me.

Pyramiding can be simple, its where the big money is made, but its also where the nerves really kick in. The Turtles used a volatility-based scale to keep adding mechanically, but this is why they said that the rules are simple but following them is hard.

 

[NVP]

i would focus on finding a system that offers solid returns without having to resort to pyramiding etc etc ....

 

[Daddybyday]

Thank you for that, Tom and NVP. I'm digesting it. I'll be posting about and IVV trade that I DID institute (paper trade) today, for completely different reasons. Please take a look and provide me with some feedback.