■ Very interesting how strongly the Nikkei 225 rallied today despite the negative headlines and economic announcements. Taiwan even more so, but I'm unsure of the relationship as I haven't observed it long enough.
■ I could be jumping the gun here but bunds and 10-year treasuries are really being offered big. The schatz and US 2-years seem to be showing some relative strength.
■ Crude is rallying strongly at the moment
Wednesday, December 10, 2008
Friday, December 5, 2008
Being "right" and having your head handed to you
No, I was not fighting the market. I was taking in contracts too big for my account. Past two days I've been persuaded by the tape to short 10 year bonds and go long equity derivatives. I did do that, on an intraday basis, but was killed by natural fluctuations which should have been held through. My futures account has suffered a 15% loss over two days. Maybe I was right about the market, but I was wrong about the trades - so its irrelevant. I'm not hurting that much about the money, but I'm pissed off with myself.
I'll continue following these markets but I've put my futures account into lockdown. I'm going to have to re-think what I can and can't trade at the moment, and how I should go about doing that while still acquiring experience and knowledge.
A few things I picked up in my diary:
Euro has been acting strangely. When we had sell-off in non-yen currencies on the non-farms and unemployment announcements it rallied with the same intensity as the yen, but reversed 15min later. I don't know if much can be made of that, but I found it interesting.
The sell-off after worse than expected payrolls and non-farm was pretty weak as compared to other sell-offs we've had. Shortly after we consolidated and the ES and DAX had some healthy buying come in little bits. To me this was very positive, especially in the face of "negative" headlines.
Another thing I liked was the relative strength in the front-end of European fixed income and the weakness in the bund, implying steepening. I mean on the short-term time frame of coarse, not the daily. But this is something I'll be following closely should we continue to rally.
I'll continue following these markets but I've put my futures account into lockdown. I'm going to have to re-think what I can and can't trade at the moment, and how I should go about doing that while still acquiring experience and knowledge.
A few things I picked up in my diary:
Euro has been acting strangely. When we had sell-off in non-yen currencies on the non-farms and unemployment announcements it rallied with the same intensity as the yen, but reversed 15min later. I don't know if much can be made of that, but I found it interesting.
The sell-off after worse than expected payrolls and non-farm was pretty weak as compared to other sell-offs we've had. Shortly after we consolidated and the ES and DAX had some healthy buying come in little bits. To me this was very positive, especially in the face of "negative" headlines.
Another thing I liked was the relative strength in the front-end of European fixed income and the weakness in the bund, implying steepening. I mean on the short-term time frame of coarse, not the daily. But this is something I'll be following closely should we continue to rally.
Saturday, November 29, 2008
working the floor
Since I last posted I've been working full-time night shifts training to be a croupier at the casino. So I've been busy.
Today I had my first shift on the actual gaming floor. Within the first 5 minutes I had a $10,000 fill (coming from the cage) to complete with security. 20 minutes later I'm paying out 297 chips with a cash component of $1,800. I also had some opportunist come by trying to steal someone else's chips. One of my mates had a patron steal another patrons chips, and this is all within the first hour of being on the gaming floor.
There is this awesome buzz and excitement on the floor, and an emotional intensity amongst patrons which can quickly turn into extreme anger, aggression and frustration or into euphoria.
At the moment I'm dealing roulette, which has heaps of addicts coming up with systems to beat the house. I also deal sic bo and big wheel and my next games are going to be either baccarat or poker.
I think that once I become alot better at dealing and be able to pay more attention to the behaviour of patrons I'll pickup alot of interesting psychology lessons.
I've moved to watching the Asian markets, primarily the Hang Seng but I also have up DOMs for SGX Nikkei, SPI, Taiwain and Kospi. I'm very comfortable with having many DOMs up now - before I struggled - but concentrate mainly on the HSI. Also when I come home, which can be from 1am-6am in the morning, i'll fire up the ES, DAX, US & Euro fixed income, commodities and currency futures to jot down global market relationships and patterns in my journal.
I've put on a few position trades but the environment has been really tough and I've lost money pretty much every new idea i've had.
I begin my studies next year and am looking to build up a big stake throughout this period so I can move to trade interstate or overseas once I complete uni.
Today I had my first shift on the actual gaming floor. Within the first 5 minutes I had a $10,000 fill (coming from the cage) to complete with security. 20 minutes later I'm paying out 297 chips with a cash component of $1,800. I also had some opportunist come by trying to steal someone else's chips. One of my mates had a patron steal another patrons chips, and this is all within the first hour of being on the gaming floor.
There is this awesome buzz and excitement on the floor, and an emotional intensity amongst patrons which can quickly turn into extreme anger, aggression and frustration or into euphoria.
At the moment I'm dealing roulette, which has heaps of addicts coming up with systems to beat the house. I also deal sic bo and big wheel and my next games are going to be either baccarat or poker.
I think that once I become alot better at dealing and be able to pay more attention to the behaviour of patrons I'll pickup alot of interesting psychology lessons.
I've moved to watching the Asian markets, primarily the Hang Seng but I also have up DOMs for SGX Nikkei, SPI, Taiwain and Kospi. I'm very comfortable with having many DOMs up now - before I struggled - but concentrate mainly on the HSI. Also when I come home, which can be from 1am-6am in the morning, i'll fire up the ES, DAX, US & Euro fixed income, commodities and currency futures to jot down global market relationships and patterns in my journal.
I've put on a few position trades but the environment has been really tough and I've lost money pretty much every new idea i've had.
I begin my studies next year and am looking to build up a big stake throughout this period so I can move to trade interstate or overseas once I complete uni.
Tuesday, September 30, 2008
breakthrough
Today was my best day ever trading the schatz.
I know its not that much for today, but I took 54 ticks trading 1 lots. This has everything to do with concentrating on my strengths. I decided to concentrate on capturing trends and getting back to basics - breakouts/breakdowns.
One DOM and T&S up as opposed to 3 charts, 3 DOMs and T&S. I figured I should go slowwww, learn pattern by pattern as opposed to pushing myself to see everything right away. Even though it was not my focus I actually caught a pattern in the DOM today. A very interesting one which I hope to see recur.
54 ticks today.
Here is a screenshot with explanations:
1. Was bearish before this but price wasn't going my way and it was still confused so I bailed. Here I remember seeing some stuff come in on tape again so I hit it.
2. Volume was really light but what actually caught my attention was the speed at which price was moving and what it was reacting to. Even one lots were moving it up and I decided it could be a great time to get some short covering going, upon seeing a few 40lots & others come in on the ask I decided to join them for the short-covering rally.
3. steam running out. indecision. so closed my long.
4. short here but hesitant, think it was the vol and also I just didn't feel the time was right for the turn quite yet - a little more sideways I was thinking.
5. again no volume but I thought it could come in later or maybe the short-covering was exhausted and now it was just no bid so even light volume can move it down. Even so was weary and quickly covered when the tape showed indecision.
7. what really got me was the amount of volume on the ask in that massive volume bar. big indecision, someone was obviously stepping in ready to take this. I just kinda hung in to see how it would work out and bailed out when more strength came in expecting consolidation.
From here I was out as I recognized choppy conditions and know I'm incompetent to trade that, at the moment.
(before everything in that picture I had another 2 trades. one which was a loss, the other breakeven).
One thing that came up in my mind continuously was "path of least resistance". I've heard Livermore say it so many times, and today I got to understand that concept a whole lot more.
I know its not that much for today, but I took 54 ticks trading 1 lots. This has everything to do with concentrating on my strengths. I decided to concentrate on capturing trends and getting back to basics - breakouts/breakdowns.
One DOM and T&S up as opposed to 3 charts, 3 DOMs and T&S. I figured I should go slowwww, learn pattern by pattern as opposed to pushing myself to see everything right away. Even though it was not my focus I actually caught a pattern in the DOM today. A very interesting one which I hope to see recur.
54 ticks today.
Here is a screenshot with explanations:
1. Was bearish before this but price wasn't going my way and it was still confused so I bailed. Here I remember seeing some stuff come in on tape again so I hit it.
2. Volume was really light but what actually caught my attention was the speed at which price was moving and what it was reacting to. Even one lots were moving it up and I decided it could be a great time to get some short covering going, upon seeing a few 40lots & others come in on the ask I decided to join them for the short-covering rally.
3. steam running out. indecision. so closed my long.
4. short here but hesitant, think it was the vol and also I just didn't feel the time was right for the turn quite yet - a little more sideways I was thinking.
5. again no volume but I thought it could come in later or maybe the short-covering was exhausted and now it was just no bid so even light volume can move it down. Even so was weary and quickly covered when the tape showed indecision.
7. what really got me was the amount of volume on the ask in that massive volume bar. big indecision, someone was obviously stepping in ready to take this. I just kinda hung in to see how it would work out and bailed out when more strength came in expecting consolidation.
From here I was out as I recognized choppy conditions and know I'm incompetent to trade that, at the moment.
(before everything in that picture I had another 2 trades. one which was a loss, the other breakeven).
One thing that came up in my mind continuously was "path of least resistance". I've heard Livermore say it so many times, and today I got to understand that concept a whole lot more.
Wednesday, August 6, 2008
Where to now
Things have been slow since I last posted. I had an interview in Sydney for a proprietary trading firm. Unfortunately I did not get the role, and so its time to re-plan.
I've put in enrollments for both Monash and Melbourne (Commerce / Economics) for next year (2009). I'm setting up Ninja Trader with a feed and will begin with some initial simulation of scalping eurex fixed income: schatz, bobl, bund.
I'll also play around with the mini-nikkei, mini-hang seng and possibly the SPI (although I will not be able to trade it for real at the moment due to the contract size and its affect on my account risk-wise).
Position and momentum trading to continue if the market environment is appropriate.
I've put in enrollments for both Monash and Melbourne (Commerce / Economics) for next year (2009). I'm setting up Ninja Trader with a feed and will begin with some initial simulation of scalping eurex fixed income: schatz, bobl, bund.
I'll also play around with the mini-nikkei, mini-hang seng and possibly the SPI (although I will not be able to trade it for real at the moment due to the contract size and its affect on my account risk-wise).
Position and momentum trading to continue if the market environment is appropriate.
Tuesday, June 24, 2008
Conclusions, as promised.
Conclusion from post-trade analysis:
Having gone over all my trades on daily, weekly and sometimes even monthly time-frames I have to say there was no real “ahhuh” moment. This is probably because I make it a habit to go over my trades every few months, but this is the first time I’ve done it with printed charts.
I wrote down the following observations (many of which are already ‘common wisdom’):
• All my winners had almost immediately gone in my direction – perhaps good reason to develop a system of scaling down when the position goes against you.
• Broad market (indices) corrections would lead to the stocks breaking down or consolidation. Consolidating in a tight range in the best case.
• My entries were too late on both my shorts and longs. Especially on my shorts. This is easy to change (I already have), but it means I will not be able to take as many longs due to time zone differences. Late entries make you very vulnerable to pullbacks.
• I noticed many of my failed trades were bought after a large weekly run (200 %+) with very little consolidation, i.e. weekly rather than monthly. If they did continue to run this was usually a trick breakout which would lead to the development of another “base” / consolidation pattern.
• Relating to the above point: I think that smaller consolidations are only really acceptable if you have a very strong industry which is also showing rampant speculation (e.g. oil related stocks like PDO).
• In speculative issues (low price, low volume types) sometimes my long entries were the actual tops. Perhaps a trap for momentum players?
• Big consolidation periods (often the double-bottom type), many months / a year were rarely followed by a strong uptrend – but usually just more chop.
• I found lots of new stocks after a run of say 30%+ would actually form two bases. One which would fakeout and then the price action would create a similar one again which was the actual breakout.
• Look for a history of long-term downtrend as these stocks are usually bad performers over the monthly /long-term period
• Buying on a “right-side of a base” rather than an actual breakout hardly worked. I would usually get caught out on a pullback and only succeed on the breakout.
• Those volatile charts showing shakeouts and fakeouts in every direction never performed as well as those textbook type charts with smooth price-action combined with volume – my big winners were never these crazy cowboy charts.
• You shouldn’t rush to get into IPO’s. They are tricky because they lack a history and often shake you out (me). See : (2007 long losers MELI #21) and also (2008 long losers TITN #3)
• It may be worth trying to use partial exits (scaling out) on smaller chart-pattern breakdowns early on (i.e. Near the buy point)
• Short setups need to be worked on. My entries are not defined as well as they are in longs. They also only work for me on a shorter-time frame and are therefore much harder to pull-off / make money from safely.
• Unless I can find a good R:R entry there is really no point putting in an arbitrary stop which was actually designed for a totally different type of entry. Go with the T.A based stops offering a good R:R, go 1% risk instead of 2% if you insist on buying speculative issues. CANSLIM (containing particular fundamental characteristics as defined by William O’Neil. See www.investors.com) stocks are the exception. Stops can be widened for these.
• Finally. Its the market that has changed (I already knew that), not so much my system. If anything my system should have improved. The problem is me. I need to be able to better determine market conditions (through experience) such as chop, downtrend and therefore know when to get defensive and when to get aggressive. This will only develop with experience - its not really something I can learn from textbooks, but they can help.
All the above relates to MY trades. Therefore it could be wrong as it is only based on a small data-sample relative to the market itself.
Other conclusions:
I need to buy some top-notch trade log software to track vast details (time of trade, high during trade, comments, chart, volatility, market environment, allows me to jot down some fundamentals and other risk measurements etc). Probably Stator AFM.
I’m going to pickup Ninja-trader (not related to my “swing trading”/ trend trading) but this will help my short-term futures trading with access to a nicer DOM and trade analytics /metrics and especially system testing / idea testing.
If I’m going to swing trade well I need better data. Industry groups / news / fundamental screening (only relates to CANSLIM stocks). But this also applies to my other shorter-term trading (this is for another time).
Having gone over all my trades on daily, weekly and sometimes even monthly time-frames I have to say there was no real “ahhuh” moment. This is probably because I make it a habit to go over my trades every few months, but this is the first time I’ve done it with printed charts.
I wrote down the following observations (many of which are already ‘common wisdom’):
• All my winners had almost immediately gone in my direction – perhaps good reason to develop a system of scaling down when the position goes against you.
• Broad market (indices) corrections would lead to the stocks breaking down or consolidation. Consolidating in a tight range in the best case.
• My entries were too late on both my shorts and longs. Especially on my shorts. This is easy to change (I already have), but it means I will not be able to take as many longs due to time zone differences. Late entries make you very vulnerable to pullbacks.
• I noticed many of my failed trades were bought after a large weekly run (200 %+) with very little consolidation, i.e. weekly rather than monthly. If they did continue to run this was usually a trick breakout which would lead to the development of another “base” / consolidation pattern.
• Relating to the above point: I think that smaller consolidations are only really acceptable if you have a very strong industry which is also showing rampant speculation (e.g. oil related stocks like PDO).
• In speculative issues (low price, low volume types) sometimes my long entries were the actual tops. Perhaps a trap for momentum players?
• Big consolidation periods (often the double-bottom type), many months / a year were rarely followed by a strong uptrend – but usually just more chop.
• I found lots of new stocks after a run of say 30%+ would actually form two bases. One which would fakeout and then the price action would create a similar one again which was the actual breakout.
• Look for a history of long-term downtrend as these stocks are usually bad performers over the monthly /long-term period
• Buying on a “right-side of a base” rather than an actual breakout hardly worked. I would usually get caught out on a pullback and only succeed on the breakout.
• Those volatile charts showing shakeouts and fakeouts in every direction never performed as well as those textbook type charts with smooth price-action combined with volume – my big winners were never these crazy cowboy charts.
• You shouldn’t rush to get into IPO’s. They are tricky because they lack a history and often shake you out (me). See : (2007 long losers MELI #21) and also (2008 long losers TITN #3)
• It may be worth trying to use partial exits (scaling out) on smaller chart-pattern breakdowns early on (i.e. Near the buy point)
• Short setups need to be worked on. My entries are not defined as well as they are in longs. They also only work for me on a shorter-time frame and are therefore much harder to pull-off / make money from safely.
• Unless I can find a good R:R entry there is really no point putting in an arbitrary stop which was actually designed for a totally different type of entry. Go with the T.A based stops offering a good R:R, go 1% risk instead of 2% if you insist on buying speculative issues. CANSLIM (containing particular fundamental characteristics as defined by William O’Neil. See www.investors.com) stocks are the exception. Stops can be widened for these.
• Finally. Its the market that has changed (I already knew that), not so much my system. If anything my system should have improved. The problem is me. I need to be able to better determine market conditions (through experience) such as chop, downtrend and therefore know when to get defensive and when to get aggressive. This will only develop with experience - its not really something I can learn from textbooks, but they can help.
All the above relates to MY trades. Therefore it could be wrong as it is only based on a small data-sample relative to the market itself.
Other conclusions:
I need to buy some top-notch trade log software to track vast details (time of trade, high during trade, comments, chart, volatility, market environment, allows me to jot down some fundamentals and other risk measurements etc). Probably Stator AFM.
I’m going to pickup Ninja-trader (not related to my “swing trading”/ trend trading) but this will help my short-term futures trading with access to a nicer DOM and trade analytics /metrics and especially system testing / idea testing.
If I’m going to swing trade well I need better data. Industry groups / news / fundamental screening (only relates to CANSLIM stocks). But this also applies to my other shorter-term trading (this is for another time).
Sunday, June 22, 2008
Post-trade charting complete
I've just spent the past few weeks taking screen-shots of every single trade from my MB swing trading account. They contain entry and exits, as well as weekly and monthly charts in some cases (to give a context when necessary).
2005 Longs which were losses
2005 Longs which were profitable
2005 Shorts which were profitable
2006 Longs which were losses
2006 Longs which were profitable
2006 Shorts which were profitable
2007 Longs which were losses
2007 Shorts which were losses
2007 Longs which were profitable
2007 Shorts which were profitable
2008 Longs which were losses
2008 Shorts which were losses
2008 Longs which were profitable
2008 Shorts which were profitable
(To get a bigger chart picture, press "download" when viewing the image)
Notes:
Files are named in the following fashion:
Trade #. Ticker. Time-frame. EE / blank
so 1.ARD.DAILY.EE would mean a trade in ARD on a daily time-frame and the EE means the chart contains the "Entry" and the "Exit".
On the chart the annotation "Entry @o" means entry at opening prices. "Entry @i" means entry at intraday prices (this does not mean my decision was made during market hours - rather, I was filled at an intraday price). The same holds true for exits.
The little blue entry arrows and red exit arrows point to the bar on which the entry/exit took place, not the specific price. On later charts however I began manually pointing to my exact entry on the bar (You will see the difference).
If entry/exit prices are not matching with the chart it is due to a split in the traded issue
11 of the stocks I have traded are no longer actively traded on the exchanges - they are therefore not included.
I will post a thorough analysis with all my conclusions soon. Your input is appreciated too.
2005 Longs which were losses
2005 Longs which were profitable
2005 Shorts which were profitable
2006 Longs which were losses
2006 Longs which were profitable
2006 Shorts which were profitable
2007 Longs which were losses
2007 Shorts which were losses
2007 Longs which were profitable
2007 Shorts which were profitable
2008 Longs which were losses
2008 Shorts which were losses
2008 Longs which were profitable
2008 Shorts which were profitable
(To get a bigger chart picture, press "download" when viewing the image)
Notes:
Files are named in the following fashion:
Trade #. Ticker. Time-frame. EE / blank
so 1.ARD.DAILY.EE would mean a trade in ARD on a daily time-frame and the EE means the chart contains the "Entry" and the "Exit".
On the chart the annotation "Entry @o" means entry at opening prices. "Entry @i" means entry at intraday prices (this does not mean my decision was made during market hours - rather, I was filled at an intraday price). The same holds true for exits.
The little blue entry arrows and red exit arrows point to the bar on which the entry/exit took place, not the specific price. On later charts however I began manually pointing to my exact entry on the bar (You will see the difference).
If entry/exit prices are not matching with the chart it is due to a split in the traded issue
11 of the stocks I have traded are no longer actively traded on the exchanges - they are therefore not included.
I will post a thorough analysis with all my conclusions soon. Your input is appreciated too.
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