I was just updating the stats column. I stopped entering them early this month and my previous goal had been 24.45% return after 16 weeks for the CTP plan. That was 1.5% weekly compounded monthly which doubles the capital about every year.
I am 13 days into the day trading plan, no real goal as I am testing right now, but I am at 21%...that's almost 6 times faster than my previous plan goal.
So, for arguments sake I ran a one year spreadsheet using 6% return per five trading day period, and running 40 weeks or 200 days. This is lower than my current by a fair margin as three weeks at the current rate would put me over 25%, so 18% for the same period. I did not compound the return but at the point where the portfolio increases by $5K I roll that back into a second lot for trading purposes...effectively doubling my dollar return at the same percentage return. With 12 weeks buffer, (I like that, 3 months potential holiday), I could add a few weeks if the returns are lower to get to the same point in a calender year.
By the end of the year I will be:
trading 6 lots
profiting $1800 per week
have a portfolio value of about $35,000
Have used little to no margin
I figure that if, (yes I do say if as it is possible for this to not work as planned), I get to the point of trading 6 lots a few things may have to happen.
I will need to...
1- switch to a more expensive stock to keep the lot sizes down for liquidity purposes
2- get more efficient at entry and exits to be able to move the larger trade sizes
3- have more than one stock to trade to take advantage of the lower beta periods of one stock
4- have 2 stocks trading simultaneously to boost my dollar returns and keep liquidity
(only one can trade at a time so a stock that is not in sync would be best)
Crap, if I use margin and I stopped increasing the trade size when it hit $60K (my $30K and $30K margin...keeping in mind that margin in my account is 3x, this is only 2x use) I would end up with $3000 per week and a portfolio balance of $85,500...based on 5% per week instead of 6%...A small fudge factor. That is $3000 per week.
So, dreaming big here for a moment...if I use these numbers and set an income replacement goal of $1000 per week before taxes and left everything else in play I could easily stop working after one year (the soonest I would) then I would be re-investing $2000 per week after the one year. That's living off of $40K and re-investing $80K...I'd balance those a bit depending on needs.
BAH! Got to keep thinking small here for now. No sense in getting grand ideas while I am still a fledging trader here as that is just begging for a huge ego bubble burst and setting me up to get emotional about the trades.
Back on track here, as I have started to track my returns based on a percentage of the daily beta captured I should be able to use this to calculate roughly what I might expect from any other stock. That makes a few assumptions about the stock being as predictable as what I am used to so there may be a paper trading trial time...or not....
JD.
Questrade, My direct access discount broker.
Thursday, August 28, 2008
Daily update.
I was not going to do anything today but I caved and opened my trading software at about 0945h to take a peak. Too bad I didn't follow it from the start. It followed yesterdays pattern, gap up, push up then a quick pullback from the peak in the very next minute and right down over the course of the morning.
I made some notes before doing anything and wrote "expect a short bias today and a possible late rally with the low around the PP". So why the heck did I place a long as the first trade? ...dumb dumb dumb. lost 29cents per share by the time I decided to bail, largest single trade loss since starting this. Forget about possibly having shorted it instead but had I just not traded it, accounting for commissions it was a $39 drawdown. I almost didn't place another trade.
7 minutes later I was into the shorts for a profitable day, too bad about that stinking first trade though, I didn't let it get to me and considered not counting it...but for the sake of accuracy I couldn't fudge it.
4 trades, finished at about 1140ish. $67 net profit, 1.34% return.
Slightly below my average daily net of $84.15 return of 1.68%
Return to date for 13 trading days = 21.88% or $1094.00
Interesting stat, long : short ratio is 1.31:1, the imbalance is due mainly to the general uptrend on the daily chart since the 11th.
Of my 8 losing trades the short losers vs long losers ratio is 1.7:1. I almost expected it to be closer to the long:short ratio.
I made some notes before doing anything and wrote "expect a short bias today and a possible late rally with the low around the PP". So why the heck did I place a long as the first trade? ...dumb dumb dumb. lost 29cents per share by the time I decided to bail, largest single trade loss since starting this. Forget about possibly having shorted it instead but had I just not traded it, accounting for commissions it was a $39 drawdown. I almost didn't place another trade.
7 minutes later I was into the shorts for a profitable day, too bad about that stinking first trade though, I didn't let it get to me and considered not counting it...but for the sake of accuracy I couldn't fudge it.
4 trades, finished at about 1140ish. $67 net profit, 1.34% return.
Slightly below my average daily net of $84.15 return of 1.68%
Return to date for 13 trading days = 21.88% or $1094.00
Interesting stat, long : short ratio is 1.31:1, the imbalance is due mainly to the general uptrend on the daily chart since the 11th.
Of my 8 losing trades the short losers vs long losers ratio is 1.7:1. I almost expected it to be closer to the long:short ratio.
Wednesday, August 27, 2008
Daily update
I tried a speculative day today, a few trades that I would not normally do, some that I would have just to mix things up a bit. I figured that I would need to add a few trades to my numbers today as I figured I would just have more entries due to the playful nature of the day. Had I been actively trading seriously I might have skipped today altogether as it felt like another flat day and many small trades didn't feel like fun...which was the drive for the changeup.
So, 6 trades altogether. Had I been on the ball I would have entered long in the 2-5 minute area as the price came off of the reaction low after the initial gap...I was too stuck on my 20 minute minimum...so I went with that. I missed a $1.24 move which I would have nabbed about 70 cents of...but no trade. Instead I rode the followup roller coaster. I had half expected the price to be trending up after the strong move but the volume petered off and I was not really thinking this through. Anywhere above $61 would have been good short entry points right up to 1023h and holding for a $30 maximum loss allowance would have kept me in if I was looking for intra-day trend trading...but I'm not.
Trades 1 through 3 were not too exciting, between all three I lost $30 net. I gave the price time to settle into a trend, entered one too soon, the other just wrong and the last made a bit of profit.
Interestingly I set a short limit order for $61 at 1035 when I saw that spike in price...missed it by 2 cents...should have just done a market order and I would have been in for $60.95. The volume dropped off in the next few minutes which was a good sign to short soon as the price wallowed about under the trendline. I ended up getting in short at $60.80, rode it down to just below the R1 and exited at $60.38 as it hovered below $60.40 on really low volume... unpredictable. It rallied briefly up to $60.47 (note that R1 is $60.46) so I jumped in as it started to head down at $60.38, my exit price last trade...almost a shame not to have held it through the rally but I am not interested in trying to squeeze out every drop, just taking profits as they present themselves. Even so I should trust the pivot points a bit more and given this a little more headroom as it did not cross the line enough to worry about....hindsight. I exited at $60.10 as the price came off the low of $59.92.
The last trade, #6, was about the same as I watched the price approach the R1 line again and slow down it's upward movement...I jumped in sooner than I might normally except I recalled the R1 acting as resistance once already today...in at $60.31 out at $60.08. Had I been planning to trade for the day I would have re-entered around $60.10 and rode it down for another 30 cents. The rest I think may be a wash but I will not even be looking at the afternoon activity until after hours anyway.
Turned out the afternoon wouldn't have been bad to trade and add to the profits. The blue line is the primary pivot point from yesterdays numbers, the red is the first resistance level R1. R2 is off the chart a bit and first support S1 is below the chart.
Red boxes are the loosing trades and the green are the winning trades.
So, 6 trades altogether. Had I been on the ball I would have entered long in the 2-5 minute area as the price came off of the reaction low after the initial gap...I was too stuck on my 20 minute minimum...so I went with that. I missed a $1.24 move which I would have nabbed about 70 cents of...but no trade. Instead I rode the followup roller coaster. I had half expected the price to be trending up after the strong move but the volume petered off and I was not really thinking this through. Anywhere above $61 would have been good short entry points right up to 1023h and holding for a $30 maximum loss allowance would have kept me in if I was looking for intra-day trend trading...but I'm not.
Trades 1 through 3 were not too exciting, between all three I lost $30 net. I gave the price time to settle into a trend, entered one too soon, the other just wrong and the last made a bit of profit.
Interestingly I set a short limit order for $61 at 1035 when I saw that spike in price...missed it by 2 cents...should have just done a market order and I would have been in for $60.95. The volume dropped off in the next few minutes which was a good sign to short soon as the price wallowed about under the trendline. I ended up getting in short at $60.80, rode it down to just below the R1 and exited at $60.38 as it hovered below $60.40 on really low volume... unpredictable. It rallied briefly up to $60.47 (note that R1 is $60.46) so I jumped in as it started to head down at $60.38, my exit price last trade...almost a shame not to have held it through the rally but I am not interested in trying to squeeze out every drop, just taking profits as they present themselves. Even so I should trust the pivot points a bit more and given this a little more headroom as it did not cross the line enough to worry about....hindsight. I exited at $60.10 as the price came off the low of $59.92.
The last trade, #6, was about the same as I watched the price approach the R1 line again and slow down it's upward movement...I jumped in sooner than I might normally except I recalled the R1 acting as resistance once already today...in at $60.31 out at $60.08. Had I been planning to trade for the day I would have re-entered around $60.10 and rode it down for another 30 cents. The rest I think may be a wash but I will not even be looking at the afternoon activity until after hours anyway.
Turned out the afternoon wouldn't have been bad to trade and add to the profits. The blue line is the primary pivot point from yesterdays numbers, the red is the first resistance level R1. R2 is off the chart a bit and first support S1 is below the chart.
Red boxes are the loosing trades and the green are the winning trades.
Notice how the price reaches the PP and pretty much bounces along for a bit...depending on the volume and activity there were four points of entry down there and if I had gotten in low enough any one of them could have held for a long trade but that middle one and the last one would have been the most likely attempts...say one 20 cent trade in the middle as the rally failed then a 45 cent trade as the last.
OK, net profit $33...a lot of work for $33 but the stocl only changed 4 cents over the day. A very emotionless day, which is the goal. I am finding that speaking my observations out loud while watching the trades helps to keep me detached and objective.
Net P/L = $33, 0.66% return
Total just crossed $1000 to $1027 which is a 20.54% return. This was my unspoken target to hit to see how many days it would take...12 trading days.
total swing or Beta = $1.70
Captured beta = 54.7%
I had figured that the price was going to stay within the PP and R1 based on the premarket bids, I wasn't too far off as the price remained around that area once it settled down.
JD
pivot points, support, resistance, lines in general...
I have a theory about the various methods of determining lines or zones of resistance and support. The latest that I am using are pivot points. These use a few simple formulae to determine where these lines may be over the course of the day. I understand that they have been used by traders for a long time to determine trading ranges expected over the trading day and have to do with "local" trading and public trading...I understand the idea but I cannot remember it well enough to relate.
I have been playing with lines for a few months now and have found an almost uncanny correlation between historical lines and fore casted price movements. I have also used recent opens, closes and highs and lows to create lines for the following days...they worked well also.
I do believe that no matter how anyone picks these lines, as long as they are based on some historically significant movements, they are a useful tool in trading. It is the consistent use of the same method for determining them in the first place combined with the consistent use as indicators and the familiarity of how the price moves relative to the lines chosen that makes them work. I think that one could draw equidistant lines on the price grid and have good luck as long as the spacing is of some significance.
I'll try to post a bit on pivot points another time as at least these seem to work and have an objective formula to find them...that makes them easier and less prone to erroneous judgment about line placement.
An observation. I was just looking at my 1 minute chart for the last 6 days for AEM and noted the pivot points from yesterday's activity and see that the have some very good correspondance with past action with respect to trading ranges, highs and lows that seem to see support or resistance with these lines.
JD.
I have been playing with lines for a few months now and have found an almost uncanny correlation between historical lines and fore casted price movements. I have also used recent opens, closes and highs and lows to create lines for the following days...they worked well also.
I do believe that no matter how anyone picks these lines, as long as they are based on some historically significant movements, they are a useful tool in trading. It is the consistent use of the same method for determining them in the first place combined with the consistent use as indicators and the familiarity of how the price moves relative to the lines chosen that makes them work. I think that one could draw equidistant lines on the price grid and have good luck as long as the spacing is of some significance.
I'll try to post a bit on pivot points another time as at least these seem to work and have an objective formula to find them...that makes them easier and less prone to erroneous judgment about line placement.
An observation. I was just looking at my 1 minute chart for the last 6 days for AEM and noted the pivot points from yesterday's activity and see that the have some very good correspondance with past action with respect to trading ranges, highs and lows that seem to see support or resistance with these lines.
JD.
Tuesday, August 26, 2008
New performance tracking setup
I just added a third spreadsheet page that allows me to track my results based on the beta of the day as a percentage of the beta captured in the trades. This lets me know how I am doing based on the price movement over the day. So far I am running between 23% and 61% captured. I think that will be more my guide for tweaking the plan rather than focusing on the money.
Hmmm....those percentages are also considering that I only trade for part of the morning and only up to four trades. Now the daily high and low may have many waves in there so I could have a percentage over 100% if I did more trades over the day. I think my target will be 100% but I may have to add an additional trade to get there....NAH, just work on getting better trades going. I really need larger intraday swings though as I seem to be decent on the individual moves, getting out near the peak (trough) but getting in a little late...although that has much to do with my win loss ratio of 28:5 (total losing trades add up $51)
JD.
Hmmm....those percentages are also considering that I only trade for part of the morning and only up to four trades. Now the daily high and low may have many waves in there so I could have a percentage over 100% if I did more trades over the day. I think my target will be 100% but I may have to add an additional trade to get there....NAH, just work on getting better trades going. I really need larger intraday swings though as I seem to be decent on the individual moves, getting out near the peak (trough) but getting in a little late...although that has much to do with my win loss ratio of 28:5 (total losing trades add up $51)
JD.
Monday, August 25, 2008
Rules: the 30 minute rule addendum
Opening Rule Change
My normal rule is to not trade until after the first 30 minutes to let the market settle out a bit. I have toyed with changing that rule if the opening price is very close to the closing price...as today's was. With a gap I need 20 minutes to get my two key moving averages caught up and an extra 10 to let the price settle into a trend or get in sync with the indices I am using for correlation. Without a gap the averages are already on the mark and the indication is that the price does not need a correction by the market makers, orders are flowing well and no automatic orders or programs have been triggered to throw the price into a huge unwarranted swing and this may just be a continuation of the previous day. I think that it would make a difference if the price opens so near a support/resistance area and it holds as opposed to perhaps halfway betwwen two lines.
My normal rule is to not trade until after the first 30 minutes to let the market settle out a bit. I have toyed with changing that rule if the opening price is very close to the closing price...as today's was. With a gap I need 20 minutes to get my two key moving averages caught up and an extra 10 to let the price settle into a trend or get in sync with the indices I am using for correlation. Without a gap the averages are already on the mark and the indication is that the price does not need a correction by the market makers, orders are flowing well and no automatic orders or programs have been triggered to throw the price into a huge unwarranted swing and this may just be a continuation of the previous day. I think that it would make a difference if the price opens so near a support/resistance area and it holds as opposed to perhaps halfway betwwen two lines.
Subscribe to:
Comments (Atom)
