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Taking a Trading System Live


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Updated January 6th 2016 by tturner86
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Taking a Trading System Live

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  #401 (permalink)
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Week 27

Only 2 trades this week, both small, both positive.

I'm sure most people watching would have given up on this strategy by now, and I understand. I am going to stick to my original plan, though, and see what happens.









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  #402 (permalink)
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I think you should update the chart (upper/lower 10% and average predicted lines) based on a gradual increase in contract size. The average shouldn't be quite so linear and I'd expect the lower 10% line would be lower that what it is. This might give you some hope that you aren't in the bottom 10%. The lines on the chart aren't giving you the information they are designed for.

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  #403 (permalink)
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kevinkdog View Post
Only 2 trades this week, both small, both positive.

I'm sure most people watching would have given up on this strategy by now, and I understand. I am going to stick to my original plan, though, and see what happens.





Attachment 138264


Attachment 138265

I find it very fascinating to watch. Thank you for journaling it.

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  #404 (permalink)
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sixtyseven View Post
I think you should update the chart (upper/lower 10% and average predicted lines) based on a gradual increase in contract size. The average shouldn't be quite so linear and I'd expect the lower 10% line would be lower that what it is. This might give you some hope that you aren't in the bottom 10%. The lines on the chart aren't giving you the information they are designed for.

You bring up a great point.

All the data in the chart is for 1 contract traded, so yes unfortunately I am in the bottom 10%. I have tried in the past to do these charts with a variable number of contracts, and (for me at least) the story gets muddled. So, I stick to the single contract chart. And the story it is telling is not very good right now!

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  #405 (permalink)
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tturner86 View Post
I find it very fascinating to watch. Thank you for journaling it.

Sort of like a slow motion car crash.

Funny thing is a month or so ago - it was at an equity peak, and I had added on a contract.

My, how things can change so quickly.

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  #406 (permalink)
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kevinkdog View Post
Sort of like a slow motion car crash.

Funny thing is a month or so ago - it was at an equity peak, and I had added on a contract.

My, how things can change so quickly.

A bit, but I appreciate it because it made me think about my trading differently.

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  #407 (permalink)
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tturner86 View Post
A bit, but I appreciate it because it made me think about my trading differently.

That's good. If you'd like to share how you think differently, I'm sure a lot of people would love to hear it. I'm constantly thinking of ways to improve what I do (just based on this strat's performance, I may need it!), so it would be interesting to hear your thoughts.

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  #408 (permalink)
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tturner86 View Post
A bit, but I appreciate it because it made me think about my trading differently.

I'll throw out one example of thinking differently.

I have a CTA friend, excellent programmer and trader. He creates mechanical systems, and does pretty well. BUT, on many of his strategies, he has an uncanny ability of when to turn the automated strategy on and off, based on whatever conclusions he makes in his mind.

I've always though that is a terrible way to do things - program an automated strategy, but then basically use discretion to turn it on and off.

But the market doesn't care what I think is a good idea. And the market is telling him that he is doing it right.

So, maybe that is something I need to look at. Certainly, I see trades with my automated strats that make me think "Huh? The trade is awful! It is going to lose." But I still let it go. Maybe that isn't always the best answer...

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kevinkdog View Post
I'll throw out one example of thinking differently.

I have a CTA friend, excellent programmer and trader. He creates mechanical systems, and does pretty well. BUT, on many of his strategies, he has an uncanny ability of when to turn the automated strategy on and off, based on whatever conclusions he makes in his mind.

I've always though that is a terrible way to do things - program an automated strategy, but then basically use discretion to turn it on and off.

But the market doesn't care what I think is a good idea. And the market is telling him that he is doing it right.

So, maybe that is something I need to look at. Certainly, I see trades with my automated strats that make me think "Huh? The trade is awful! It is going to lose." But I still let it go. Maybe that isn't always the best answer...

You hit the head on the nail, I have been thinking about how and why to use automated systems. I trade discretionary using price action, so automation seems foreign to me. So it is interesting to see how you created your system and then trying to execute it.

But the biggest thing I have been thinking about differently is the scaling of position size. Before I just thought once I get the x dollars I add a contract and for every x dollars I ramp up. But I find it interesting in how each time you have ramped to the second contract the wheels comes off so to speak. So that has made to rethink how I need to scale my position size.

I am reading The Trading Game and Super Trader: Make Consistent Profits in Good and Bad Markets by Van Tharp, so I have really been thinking about my position sizing and then thinking about it from different perspectives. Viewing your journal has given me a different perspective on trading in general. (Although it is having difficulties, I do not believe that it is a bad strat, but may take time to be profitable).

A second thing it has made me think about is how to handle drawdowns and how and when to scale your position size down to protect your account.

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  #410 (permalink)
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tturner86 View Post
You hit the head on the nail, I have been thinking about how and why to use automated systems. I trade discretionary using price action, so automation seems foreign to me. So it is interesting to see how you created your system and then trying to execute it.

But the biggest thing I have been thinking about differently is the scaling of position size. Before I just thought once I get the x dollars I add a contract and for every x dollars I ramp up. But I find it interesting in how each time you have ramped to the second contract the wheels comes off so to speak. So that has made to rethink how I need to scale my position size.

I am reading The Trading Game and Super Trader: Make Consistent Profits in Good and Bad Markets by Van Tharp, so I have really been thinking about my position sizing and then thinking about it from different perspectives. Viewing your journal has given me a different perspective on trading in general. (Although it is having difficulties, I do not believe that it is a bad strat, but may take time to be profitable).

A second thing it has made me think about is how to handle drawdowns and how and when to scale your position size down to protect your account.

You bring up some interesting points. Is it more than just coincidence that, following my rules, I've increased size 2 times (both times, after a run up obviously), only to have to retreat when a bad streak happens? I would have been better off trading constant size.

It is definitely worth thinking about. Of course, it looks like I'll have some time now before I get to that 2 contract threshold again!

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