I Just realized that this journal challenge ended yesterday and think the best way to cap it all off is with a breakdown of some of the lessons I've learned and opinions I share throughout the last couple of years using bloodhound and blackbird.
If you've been following the
PnL for my systems, last week was 1,600 for the group of systems I mentioned moving to live capital last week.
LESSONS/TIP/OPINIONS & TWO CENTS:
1. Dont waste your time with squiggle indicators. - If I could have all the time back I wasted trying to program an intraday system that uses some second panel ocillating indicator back, I would trade that for all of last years profit. That is the flame that sucks in all the newbie algo trading moths. I wasted years of my life trying to program systems based on cross overs or histograms or some technical derivative of price. Those systems don't work over time because they can not by default take into account different market states. They work sometimes and that only makes you think they will continue to work.
2. Swing Trade. - Along the same lines, programming a swing trading system is the only way to fly in my opinion. You have to cancel out the noise and randomness of an intraday market and the only way to do that is with larger charts and less trades. I understand the argument of the law of large numbers but if you want to produce consistent profits over a month
basis, swing trading is the way to go. If you cant swing trade... you probably shouldn't bother with automated trading.
3. High R multiples and positive expectancy models - If you don't know what that means. Google it and come back. That's the whole point to all of this. There are good webinars on
F.IO that talk about this. Van Tharp is the foremost expert on the concept of position sizing and r-multiples but there is very little free quality content of his online.
4.
Always save your templates after changes and use the standard,
alpha,
beta, live method to keep track. In addition use the description boxes inside of bloodhound to leave notes for your future self.
5.
Updates If you're reading this in 2020 you should be thankful because a lot of the kinks have been worked out. The early versions of blackbird were not stable for live trading and I payed the price as did others I'm sure. Always update to the current version and save your templates before you do.
6.
Have a failsafe indicator built to close out any unprotected position. If there is ever an issue with blackbird, your orders can get messed up. Program an indicator to close you out of an unprotected position in the event that you have a platform/software issue.
7.
Have a second account to separate long and short systems. I focus on the net net on a monthly basis. that's it. The best way to have systems run correctly and efficiently is to have shorts in one account and longs in the other. There are a whole bunch of benefits to doing this.
8.
Options are your friend protect your portfolio with options. Even if you have long and short systems, its always a good idea to have cheap
OTM options on hand in the event that corona strikes.
9.
Don't touch it leave your systems alone to work or not work. Touching them on the fly is going to cost you one way or another.
10.
Decide if its income or growth you want because you cant have both at the same time. Franchise your systems into accounts for one or the other. Accounts you withdraw from will never grow.
