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The HSI Index Futures Scalping Experiment


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The HSI Index Futures Scalping Experiment

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  #31 (permalink)
Sydney+Australia
 
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veloxtrader View Post
Great thread @Godzilla keep it up!

Looking forward to part 4 of your story as well!

Velox

Same here @Godzilla, Can't wait for part 4.

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  #32 (permalink)
Brisbane, Australia
 
 
Posts: 179 since Nov 2013
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veloxtrader View Post
Great thread @Godzilla keep it up!

Looking forward to part 4 of your story as well!

Velox


Hi Velox,

Last couple of trading days have been tough need to harden up and accept it as part of trading -
Don't worry i'm working on part 4....starting to get a bit boring as you head towards your trading goals in life.
It's the trading struggles (of which I'd had many) that are the more interesting subjects I would assume.....trying not to jump the gun but it's the mental changes that I've made that have made all the difference....Van Tharp was correct...trading is a pure mental game after all. Wish I was smarter to understand that earlier in life. Doh!

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  #33 (permalink)
Brisbane, Australia
 
 
Posts: 179 since Nov 2013
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How quickly things can turn to $hit....another flat day and more worryingly 2 trade errors which cost me most of the P&L for the day....basically got bored and lost patience....market was just churning higher ever so slowly and I just hate to buy at the high of the day but it worked multiple times today and I was too chicken to execute..

Need to remind myself that "no trade" is better than a "dumb trade"


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  #34 (permalink)
Brisbane, Australia
 
 
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I was so pissed off with myself for trading like a pussy this morning that I'd give the noon session a crack...normally I don't like the noon session as it moves slower and with less predictability.....my target for the noon session is 2 trades - if I get it - time to turn it off and chill....kids just got home from school as well.
Target accomplished....revised stats for the day.



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  #35 (permalink)
Brisbane, Australia
 
 
Posts: 179 since Nov 2013
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Or more importantly realise it’s time to learn from others smarter than yourself. Acknowledge you are not as smart as you think you are and that in hindsight you might have wasted thousands of hours of market research versus just piggybacking of others to save yourself time and money and frustration.

But then the flip side argument is that without doing all that research you wouldn’t be able to recognize let alone have the trust and faith to trade something that is not your sole creation? Shit happens as they say.
The difference between a smart man and a wise man is that the smart man learns from his mistakes a wise man learns from others mistakes.

(2017 onwards – time to wise-up)

I was busy doing investment property renovations in 2016 and 2017 selling down one asset per financial year to minimise my taxes, the easy credit conditions had passed and it was time to de-leverage the portfolio as I was running a massive FX position as the loan was in JPY whilst the assets were in AUD and the loan had switched back to P&I repayments, the market was going nowhere so it made sense to refinance and slowly sell down to minimize the tax burden. Property renovations look great on those TV shows but SUCK big time in reality. It’s a lot of work coordinating builders and trades people and then dealing with RE agents and sales contract negotiations etc…and finally you have to pay a lump of tax at the end.

I was now getting seriously bored with the RE game and as I was approaching 50. Tax residents in Oz have the option to run your own retirement fund (directly) that you can access tax free from the age of 60 – assuming they don’t change the rules on me.

I honestly(not sure why at the time?) thought I could outperform the highly overpaid Fund managers who were currently managing my retirement fund, remember I’d spent my whole career working within the markets and had even worked on the same floor as a Market Wizard in London and multiple big traders around the world…..but given my past track record of personal market losses in the markets I knew my current research efforts would not yield success, so by some stroke of genius (or more likely desperation as I was running out of options) I thought back in time about all the finance books I had read over the years there was one author whom I’d met personally and trusted who had published a book which compared a lot of longer term stock models with disclosed code and historical results that easily outperformed the benchmark index’s (and hence by design the passive ETF index fund’s that now exist also) . So in the spirit of never giving-up (i.e. stubbornness) I decided to “manage” the funds myself by accepting that the stock model was superior to anything I had created and deploying it - WTF – why not?

I then replicated in Excel the stock model that pulled in the 200 stock closing prices via GoogleSheets, then ran each stock data series through the model and generated buy & sell signals – stock code, how much , stop levels and entry prices….it took a couple of months to get into production then I tested it for 12 months on live data (forward testing) with great results (20%+ p.a.) over a few different markets. By the end of 2018 I had set-up my new family retirement fund and fired my old fund manager by transferring over the funds and live trading in my IB retirement account…..the results have been excellent live-to-date and in-line with the books results….TICK…..so now that my long term retirement model algo was a success for the retirement fund, admittedly it was not my creation but I was happy to piggy-back off someone’s else’s work (and sacrifice my ego from the equation). Running it live every day gave me a new sense of confidence that ultimately I may find a solution to my LONG-TERM TRADING GOAL of being able to day trade futures profitably.

In 1998 (yeah I know it’s a long time ago don’t remind me) a book by - Martin “Buzzy” Schwartz (Title:Pit Bull) was published – about a smart guy with a huge risk appetite who traded the markets mainly for his account – I really loved the story and thought to myself…I’d be happy to be 1% as good as Buzzy…yes he’s that good….(he’s a $5M+/year trader) I wanted to be able to go into my office each day and make $500+ on average each day from trading….that was always the goal. But how to do it….I knew from failed past experiments that my intraday models where not that effective and prone to market shifts in volatility – (ORBO no longer worked)…a lot of market wizards used discretionary trading but with a methodical style (further supported by Dr Van Tharp who modelled the world’s best traders) was the only trading option even if it involved screen time which I was always hesitant to do…..but if you wanted the BEST returns you had to put in the work there are no shortcuts in the markets – you will get found out if your lazy. By chance I read about Macks Price Action Trading course so ordered the manual in late 2018 and after reading it multiple times and started viewing the daily vids AND most importantly traded on Sim live-data for over a year turning the account from $10,000 to $70,000 in 12 months…this was the turning point. The accuracy and results far surpassed anything I’d read about or generated myself in testing….this was the Holy Grail I was looking for…..but most importantly within myself I know I can now do it, if I follow the rules and have a bit of patience to wait for the good signals to set-up. It’s something I’ve never had before after all the years of searching….of course some days are not so great but on average as long as I’m hitting my target tic number I’m happy to keep following the system….it works (for me). Which means it can work (for you).

And with that, I hope whatever system you trade with – whether that’s someone else’s creation (fast track) or your own creation (slower track) – good luck, but most of all accept it is possible…..just don’t be a stubborn prick like myself and waste valuable years of your life on this stuff when the answers are within.

Cheers Godzilla

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  #36 (permalink)
Munich, Germany
 
Experience: Intermediate
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Thanks for sharing some of your journey, Godzilla. I can certainly relate to more than a few of your own experiences and observations. But more importantly, I'm glad that you've found success and hope that it will continue to grow.

Just out of curiosity, can you tell us a bit more about the retirement fund system you're using? Does it perhaps incorporate some trend-following rules and concepts?

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  #37 (permalink)
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Schnook View Post
Thanks for sharing some of your journey, Godzilla. I can certainly relate to more than a few of your own experiences and observations. But more importantly, I'm glad that you've found success and hope that it will continue to grow.

Just out of curiosity, can you tell us a bit more about the retirement fund system you're using? Does it perhaps incorporate some trend-following rules and concepts?


Morning Schnook....the original book is called "Unholy Grails" by Nick Radge...its the 20% Flipper system. Works off any 20% move from a low then go long...with a 20% stop loss....maximum 20 positions (each position is 5% of account size) - hence every position carries 1% risk overall.....daily data and entry/exit orders are executed next open....with limit orders using yesterdays close...really simple and robust. I'm running a demo on the nasdaq 100 YTD is +15.8% - already...ie it works.

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  #38 (permalink)
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Godzilla View Post
Morning Schnook....the original book is called "Unholy Grails" by Nick Radge...its the 20% Flipper system. Works off any 20% move from a low then go long...with a 20% stop loss....maximum 20 positions (each position is 5% of account size) - hence every position carries 1% risk overall.....daily data and entry/exit orders are executed next open....with limit orders using yesterdays close...really simple and robust. I'm running a demo on the nasdaq 100 YTD is +15.8% - already...ie it works.

Interesting, thanks. Sounds like something that would do well in this market.

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  #39 (permalink)
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Smashed it today(4/4)....my little pep-talk yesterday worked - found my discipline again. Super patient today...really wanted to get into some of the strong trends but you cant without a trap set-up...

Funny how the market closed the overnight gap then traded lower...I was so close to buying on the breakout but no set-up occurred ? LOL - like everyone else I'm assuming.



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  #40 (permalink)
Legendary Market Wizard
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Godzilla View Post
Smashed it today(4/4)....my little pep-talk yesterday worked - found my discipline again. Super patient today...really wanted to get into some of the strong trends but you cant without a trap set-up...

Funny how the market closed the overnight gap then traded lower...I was so close to buying on the breakout but no set-up occurred ? LOL - like everyone else I'm assuming.

Nice job brother. Overall it has been a sleepy session. Which I actually don't mind much ... the grind has lots of ups and downs, so it's quite nice to trade. Better than a grind that doesn't pull back, and better than a non-directional market that makes news highs one minute and new lows the next. My stats show we're about 50% of normal volume at this time of day for the ES (computed since Jan 1). So, not a day to expect huge moves.

I've been scratching my head on the nikkei ... down net -5 ticks on it, as it, like china, is in a slow grind but in a much less tradable way for me. The thing about the Nikkei is that once they turn the book, you literally have to hit/lift the market to get in/out. For example, I was long and they kept grinding and grinding up... then when the book flipped, they would do the "walk down" .. with 200 bid, someone hits it for 400, so now 200 are offered ... about 80 contracts lift the offer, then they'll offer lower again at the bid for 300-500, another 300 or so are offered, and so it goes.. they walk it down, and because they trade the level one chunk at a time, you have literally no chance to get a fill. Once I got in somehow at 18th in the queue and still could not get a fill, even though it sat there for 15-30 seconds. It's brutal... it's great when you're on the right side of the trade, but when you're not, there's no worse feeling. So in general, I hit in/out on the Nikkei but with a value area in this session of 13 ticks, it really does become pretty impossible to trade. So, I just leave it alone after a while!

I traded the HHI and got 70 ticks out of it (one HSI for -5 ticks). While using the action on the HHI itself, the HSI really is the driver, it feels like, so I traded off of the HSI, but the action is less manic in the HHI so I enjoyed it. With such low volume though, not sure it will scale to where I'll want to be, but we'll see. Got about 10 points on the ES as it does its thing. So pretty much the norm for me .. a little ES, a little MJNK, a little china.

Edit: despite the low volume, both china indices are hovering near a composite 4-day low -- see attached HHI picture. In my MP-centric macro view of markets (macro meaning longer than a day), this is a super poorly auctioned 4-day area that is begging to be re-auctioned. If we hold these highs, the probability is high for a test up to those highs, which would be about a 3-4% move. It's all speculation, but it's one scenario that is in play, IMHO.

edit: I just realized that I'm posting this in your journal, sorry for cluttering it up! I will post this kind of thing next time in the general Asian session thread!


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