Posting a journal covering a simple ES trading strategy that has a base 10:1 (win/risk) where the returns deminish over each loser in time .
I am computer illiterate so getting me to set up charts etc will be a challenge...
In the meantime, I can say the settings are a 5 point price range bar and an ema setting...that'it...
The average loss runs around 1 point...profit goal 10 points... Average trades per day varies between 3 and 6 .
After 5 consecutive failures will increase allocation by 1 contract...and every 5 consecutive losses will continue to add another contract.
Account adequately covers initial loss by approximately 480 times.
I shut down trade before close and re open...just a habit I have developed...can go for me as against me...
Downside... needs 23 1/2 hours attention!!!... and a lot of patience...and there will be times that I am going to be "lucky" by missing a trade as I can be very unlucky if it hits and I am not on it..I accept that.
ES market volatilty suitable for trading this method......not perfect..won't get rich ,but will be profitable..
In the meantime I trade ES and 6E ...maybe journalize a strategy in 6E at a later date...
To each his own, but if there is one thing I would like to say is that I have finally come to grips with being properly capitalized to trade...
Hoping journalizing will keep me focused and assist in maintaining discipline.
Trader
The following 4 users say Thank You to Family Trader for this post:
I don't think the addition of another contract would necessitate 5 losses in a row. If you do have 5 in a row, perhaps you should rethink your strategy. Sure it does happen from time to time, but the post's I've read show that if you have 3 losses that day, you just aren't in the groove and need to take the rest of the day off.
Also, multiple contracts on the ES starting out would be murder on your account. Theoretically, 1 contract's profit target would be the same for 2 contracts, or even 5 contracts. Why don't you create a strategy which is profitable with 1 contract and add multiple's after ensuring consistent profitability?
The following user says Thank You to JohnnyAustin for this post:
Thank you for your observation, however there a couple of points I need to make.
It is accepted that there will be strings of small losses...the losses average around 1 point...easily affordable in light of the profit goal being 10 times greater.
And what happens if the fourth trade on the day was a 10 point winner?...does that mean I still was not in the 'groove',because I had 3 successive losers?
Factually, the value of the second contract winner will be greater than the first contract winner until approximately the 8th successive loss.
I like criticism because ,more often than not, a little 'gem' can come out of it...
The following 3 users say Thank You to Family Trader for this post:
I think it's fine to have a system that has a lot of small losers with a few big winners. It is outside most people's comfort zones though.
I notice you state you are computer illiterate. As such - could you tell us how you managed to figure the win/loss ratios and the overall profitability of the system? This is something most do with software.
The following 2 users say Thank You to Jigsaw Trading for this post:
I think the OP has a trading plan, which he is sharing with us, of which we dont yet know all the details....
first of all, 5 losses in a row are not that big of a deal, if you paid attention, he limits his loss to 1PT.. so the odds are still on his favor.. (he does not mention drawdown, but that is another story)... considering he has not provided any additional data, it would be premature for you to state that he should "re-think" his strategy.
lastly, as long as his account his properly capitalized, $50-100K IMO, he can take quite a few of those 5 losers in a row and survive, and by adding another contract he is leveraging sort of a martindale strategy to recover his losses... again 10:1, without more details, is f**** amazing if it is realistic..
most people want to have no losers... which is totally unrealistic... I rather have small losses that I know will happen, than the catastrophic lost that eats half or more of my account because I could not handle being wrong. It is good to be wrong, as long as it is manageable.
dood... people where trading before computers .. ... and a decent math guy can calculate those ratios without major problems... most traders are drilled on math.. if not...
dont believe me? take the test and see how you do...
Pen and paper ...started off by drawing graphs for stocks until it became second nature to anticipate the 'next move'...Numbers are simple if you keep them simple...I walked out of math 2nd year high school...so I have to keep it simple as that is all I know.
Like the Duracell battery this little strategy.. it justs kept on keeping on...
Basically comes down to the law of long numbers ,as they say, and a simple money management strategy...
Incidently, my stop is approximately 10% of current daily balance...most would be aghast at such a prospect I suppose, but it has to take at least between 26 and 30 consecutive losses in a relatively volatile instrument to take a 'hit'.
On the other side...trading has to cover the potential stop with at least 7 winners...
It is a grind...
BTW...can someone tell me if I should be providing real time trades or wait until the end of the day to update the journal?
The following user says Thank You to Family Trader for this post:
your preference... RT trades provide IMO validity to your skills... hindsight is always 20/20.. and it is easy to mark up a chart after the fact...
as a recommendation... to capture your charts.. just press "prtsc" and then open click on "start" and select run and type "paint" ... pless CTRL+V and then just press "select" ... choose what you want to show (the chart) and press "crop"... and then just save the pic as a PNG.. and then upload as an attachment to the forum...
that should help you out to make the posts complete...
Ok...I have my first trade for this journal..Short 132025...I don't expect this afternoon to be too productive, however there is a chance somebody could shoot Ghaadafi and that will set the cat amongst pigeons.
As for charts...I will think about that.
As I write we have a reverse ...now long 132075...target always +/- 10 points
It maybe that i may refrain from posting the trades until the EOD...otherwise could be using up a pile of pages and I have to stay focused ...
The following 2 users say Thank You to Family Trader for this post:
Tried to download yesterdays/overnight trades...blew it...have to wait till daughter gets home...
In the meantime, we have a new series 1underway...profit goal always +/- 10
S 2650
L 2750
S 2675
Ok...just a quick update and I can point out a little 'quirk' that will be evident in the chart I hope to post later
First we have hit series 2 (6th trade)..before that we had the following trades..
L2750
S2575...nasty one...got nastier as it flipped back the other way in the same bar...and now we are in series 2 ..point out in chart
L2700..that is how i take my entries
S2625...looking good for awhile...appears to be ready to reverse as I write
why automate it with NT7, when you can for the same $$$ automate it with MC, and now with MC having chart trader and DOM on MC7 ... one does not have to do much of anything with NT7 unless one really wants to...
MC supports OEC without issues.. it supports Market/Limit/Stop orders natively, and OCO's programatically within MC...
so you can stay with OEC if they are reliable to you, and just pick MultiCharts... my 2 cents... and as a disclaimer, I own both NT7 and MC... and I find MC to be easier for simple coding and NT7 for very, very complex strategies... but keep in mind that C# is not all that fast, but it appears as your strat does not require speed of execution and analysis..
Lo and behold, my Broker, a decent guy, says NO...that is my aggravation with OEC...they seem to run off in tangents...love their platform as it is simple for the simple minded...BUT their support STINKS...!!!
I am seriously considering giving Mirus a chance unless I hear/read something untoward...
I don't have a lot of time to mess around as I want to set up automated sub accounts....and yet I am one step less than "dummies for auto trading"...2 left thumbs that have cost me over time...
reality is that many closed platforms, OpenECry included, publish an API... TSS(MultiCharts) has supported OEC API for the past 4 years I believe.. you can go to their forums and check it out... even better, download their MC7 beta and test it out.. you will see how it works and test the connectivity before doing anything.. the beta is free for life... and for automated trading, the demo version is good for 30 days.
as to Mirus.. hmmm... they are a decent broker... I have used them... but they are not the best broker... I would rather recommend to you Velocity for their simpler account management features (very much like OEC platform) and also their tech support..... for the best pricing DeepDiscountTrading(CrossLand)... unless you want to go with Advantage Futures (but their account management platform is just awful)... another good account management platform is Vision Financial (Optimus is an IB for them).. their comms are ok..
anyhow, if you are truly not as computer savvy, please dont waste your time with NT7 & C#... stick to something like EasyLanguage(MultiCharts/TradeStation) that can be coded rather simply, but it is powerful enough to write anything complex... specially if you are using off the shelf indicators, etc. one does not really need C#...
When it comes to computers I'm still as 'thick as 2 planks' ...trust me...but at the same time I understand what you are trying to say...
Crazy at it may seem, to be successful in this business (given the technology available) I HAVE to believe it is NOT a 'one army band'...
It seems to me that there are individuals that want be able to trade, but for God given reasons cannot, and yet have abilities that can support the trader...so would it not make sense for individuals to recognize their individual talents and combine them to achieve the 'common goal'...
Probably getting off track from what this journal is supposed to be about...and talking out of my butt...
I completely understand what you mean... there is no single man hedge fund... usually, not always, there are those with the capital.. then the traders with the ideas and abilities... the quants (which normally know how to program) with their ideas as well... the techies.. the backoffice people... and all together make the pie and put it in the oven.. each with its own specialized task... to make lots of $$$, it takes a team.
there are plenty of guys on this forum that might not have a strategy that would certainly love exchanging skills... and then there is the mighty dollar as well, since programmers are for hire..
Ok...we have new set up underway...I missed the first trade...but i still start from scratch. I don't particularly like Wednesdays or Fridays, but can only trade what is given as i have no idea of the outcome...
S130350
additional trades
L130375
S130300
L130300
S130200
L130325...got 'flipped'...and now series 2
S130275
L 130400
Have woken up to find my missed trade has cost me +10 at 4th level 3rd trade...cost me big time as losses very small....damn, damn!! ...can't be here 23 hours a day and I do have a life. The trades would have been
S130625
L 130800...and it hit
In summary, the 1st series was (3 1/2)...2nd series was net ( 1 1/2) as had a profitable trade...3rd series was net profit...+3...
Overall series was net loss (2)....plus comms on 30 contracts... a pain
After my little disappointment from last night...there was absolutely nothing to do...and probably not before tomorrow sometime IF it backs off to around 1223...
One of the things I am going to explore is the dirfference between setting the profit goal based on the initial entry as opposed to running profit goal...
Reason although there should be little difference it may provide opportunities to exit earlier with a profit if the initial entry is lower + side/ or higher - side compared to the running profit goal of +/- from the last entry.
Have to find time to do it ...my only concern is what kind of additional exposure do I have when compared to the 2 different profit goal levels...not concerned about the profit differences.
I would go with the lesser exposure even if it means less profit...
Williams% is voodoo...I trade using it as a contrarian indicator from what it is intended...only used when I have not a trade on..runs around 50% ..pretty much most of the time.
CMO is work in progress...has high probability signals around +/- 40 and 50 'breakdown'
I use EMA100 and a 5 point momentum price range...seems to be unique to OEC...so you can look at straight 5 point price range using other platforms...
I was going to switch brokers and go with Ninja...have completely backed off and will definitely purchase MultiCharts and stay with OEC..
BUT I will need help with writing my stratgies to go 'auto' as I am pretty dumb when it comes to computers .My strategies are simple with just a couple of conditions related to order placements and stop loss ...the latter runs off daily opening balance percentage NOT price ..
Someone?
The following user says Thank You to Family Trader for this post:
Thank you for your reply. Currently I have NinjaTrader 7 and CMO (it's probable OEC inbuilt indicator) is not avalable, I added EMA 100 to my ES chart. Could you check your indicator and let me know what the period of William's%R is? Please check the attachment for my request. TIA
CMO is Chande and it is on Ninja ...Williams set at 10...thanks for info on PM...fyi, distinct difference between my momentum 5 point price range and standard 5 point price range, but same logic can be applied.
Trader
The following 2 users say Thank You to Family Trader for this post:
Thank you for the information. You stated in one of your posts that you intended to switch to NinjaTrader. Do you find NT has Momentum 5 Range Bar type which you use in OEC? I searched futures.io (formerly BMT) and Googled; but, I could not find anything about Momentum Range Bar type. Could you help?
Two more questions----a. What's the period for Chande Momentum Oscillator ? b. Does the time showing in your ES chart EST (Florida time)?
It seems to be unique to OEC...and I really like it....it seems to 'quieter' than the price bar.Maybe somebody can find out how they do it (formula)...beyond me...
No ..as stated earlier I am not going to go with Ninja....will definitely go with MultiCharts , but whether I stay with OEC is another matter...
CMO=14...yes it is EST...btw ..CMO is basically stochastics...I propose to use it for extemes breaking down...have not traded it earnestly though as it still 'work in progress'...
Ok...but you have to understand the 'flip' is the same bar...as for posting...I can put up a chart ,but the trades are OBVIOUS to the naked eye...unless there is a flip...I just realized I haven't put up a chart for the last couple of days...will put up one for today when my daughter gets home otherwise have no idea where it will finish up being!!!
As for 'wordage' on a chart...I would be the last person you would ask!!!
I'm typically a leach on futures.io (formerly BMT) so it feels good to come to the party with a gift. I second Optimus -- a neighbor or yours in Boca. Small boutique broker with rithmic feed, personal attention, and low fees. They support Ninja, MC and Sierra and would be able to help you automate or direct you to the right source. Matt Z is a member here. PM him.
I did look at trailing stops,but was not comfortable with any length....am considering using a CMO 'extreme breakdown' as a possible exit and reentry +/- 3 points...looks OK , but not satisfied it will hold up as it can come quickly in series and be a 'false signal' and I am left with minuscule profits , or even a net loss, while it runs to original target.
When I become proficient with MultiChart package I will be in a better position to 'tinker'....something I loathe doing as it might turn my head.
Finally got done...I misspoke earlier...the target was 132000 as 131000 was lowest BUY...drawdown exceeded 5% at the end of the series...
summary of trades following from above
S131175
L131275...end of series 2
S131225
L131325
S131225
L131300
S131250..end of series 3
L131225
S131125
L131250...flip
S131175
L131200........profit goal 132000...without getting to all the details, I finished up with a net loss after comms..!!!
Don't like that...what had happened is that the final trade was at the end of a series and the target shifted a net 2 points lower from last entry.
Last night was a series of trades, however I did not take any of them as I had a very long and frustrating (end result) day yesterday and I needed some good rest...
I am rested and ready to move on...never like Wednesdays and it turned out good last week....so who knows.
Sysot1t....I am going to put more effort into determining a trailing stop, because while the series loss may average 1 point losses, they do compound to give me concern in the 5 th series and by that time there were at least 2 or 3 good runners that rolled back where I could have taken good profitable trades.
Generally, I never let a winning trade turn into a loser except for this strategy and I am aware of my potential loss here.
if I may suggest something... take a look at ThinkOrSwim... I think based on what I deduct to be your trading style, their platform will suit you a lot more... and here are the reasons why:
1) You dont seem to trade extremely active (e.g. you are not a scalper)
2) You need to monitor your positions 24x7 and the ability to trade from anywhere (their platform lends itself to it)
based on those reasons, here are my points why TOS might be for you..
1) The platform will run on a Table (XOOM or iPAD)
a) With a table, you can be anywhere with the family. so no sacrifice there. You do need to ensure you have wireless access which can be done via cell phone tethering, via built in cell phone on the tablet, or via wifi.. comes down to where you are when you are trading if home or out in a restaurant enjoying the family.
b) Order entry and charting will be available, but you need to get used to using your finger on a screen as a mouse.
c) You can go to sleep and setup an alert that you can hear if a price level is hit.
d) You can actually pay a few experts to code anything you want on ThinkScript, so there is a community for it.
2) You can negotiate the costs with them to match or improve on what you get from OEC
3) They have a new ATS named Prodigio (which is not all that, but your rules are simple)
4) You can trade equities/options/futures and even forex(but stay away from FXCM so dont trade forex with them) via their platform
5) their record keeping will work with TAPRO(well, I find it that I can deal with my taxes better by using TAPRO, you might use something else)
lastly, you could also ask OEC what are their plans to support mobile devices with their fat client.. in specific iPAD or XOOM...
also, you dont need a table if you dont want to... before iPADs where the it, there were tabls from IBM .. their Thinkpads are excellent, all my notebooks are Thinkpads.. and the buy from lenovo didnt ruin quality... if price is no objective, look at X201 SEries Tablets.. they start at $1300, but properly configured it will set you back $3K..
the advantage to the full tablet is that you can still run OEC trader on it at 1280x800 and use a pen on the touchscreen... and still have it next to you in bed with alerts to wake you rather than to sit on the screen monitoring things like a mad man ...
anyhow, just my suggestions as to what you can do with technology to facilitate your trading..
Gee ...it is nice to know there are knowledgeable people around that will give a stranger a hand.
Thanks ,sysot1t...I hope there will be the day I can return the favor...
I have been very busy today...managing my trades ...this strategy, besides complementary trades in ES and 6E.
In addition, in between preempted alerts going off, I have been sussing out a method to establish a sound trail loss on the published strategy...it takes work and patience...I know what I want to do, but need a walk forward to confirm..
Will get around to covering my trades later today.
Back on deck...missed 2 complete series of +10's for profit while not well...thems de breakes...
Have decided to limit my trading by having a long period between each completed series as a result of 'over doing it' recently. Need to rest and as my wife says, "The market will be there when you wake up...just make sure you wake up!!!"
While doing nothing ...I am satisfied I have come up with a solution related to trailing stops that i can live with..
Another series completed with a profit..9.25 before comms
Will be applying a method earlier where the CMO reaches a given 'extreme' condition. there were two instances during the trade where it could be applied .
Will put up a chart later and highlight the 2 extreme conditions..
There was no trading this afternoon...did not get in as EMA stayed positve all afternoon...Will open new series after 1.30 am,subject to radiation leaks...
Todays trade was a close call...had approximately 3 more trades and would have hit a stop....took 26 trades equal recent high to complete series...but profitable
Not trading today...never really like Fridays...focusing all my day on Multicharts and probably annoy the hell out of them with some specific needs in order to justify buying their product...
Have had an exacerbating weekend trying to get data from MC..don't know whether it was them or broker feed or CME/Globex...but was not fun
As a result of Friday's fortunate lay off from this strategy I have made a specific change to the EMA setting which will bring in (hopefully) more profit hits from the CMO 'extreme' range. In essence, I will be in effect reducing the potential +10 profit goal for the sake of less ,but more frequent profits at the extremes while,and more importantly, reducing potential exposures to my stop loss method.
I will not disclose the specific change for a week, but will be (am) running the change with the current EMA100, meaning I am running double contracts ( exposure) where both levels trigger a trade.
In effect, if it goes totally wrong over night I will have 2 losses.
Currently was S at 7675 and 7525
L 7600 and 7675...might be a little confusing but in time will resolve itself.
curious, did you watched it all night? and how do you manage to watch things overnight without getting bored out of your skull?
I cant get around entering trades on US Indexes after hours, I am just afraid lack of liquidity will go against me if someone sweeps the order book given I cant put stops on spreads ... so I have to watch the spreads through out the day...
last night was a good night to trade just as you state... I wanted to put on a spread on the YM/ES pair, but I just could not bring myself around it... instead I placed it this morning and I ended up only making $100 for the day vs. $1200 ...
$100 is a lot better than what a lot of traders made...but I understand your point.
No,I did not watch it all night...my son (19 and one of the rare times his was home!!! ) monitored the trade...he knows what to do if there was a change...
I also have an alert system the whole house will hear if necessary...another reason for automation as it is getting 'old'.
While up last night after 2 am , I did a lot of work so was not bored ...when second trade completed ..hit the sack. If there was another trade...would not have mattered.
Progressing with automating...need a couple of weeks to walk forward and de bug, if necessary.
Trader
The following user says Thank You to Family Trader for this post:
thanks for the feedback.. it has given me a few ideas for setting price alerts.. I am also looking at CQG spreader, from what I read on their User Guide they do have stops and they are server side.. and there are some cool features on CQGIC that after reading I am finding of use...
glad to know that Multicharts is coming along nicely for you...
Have started a new series...S 9175
L 9250...this is the first of the 2 sets...the other set will not trigger until sometime later at a lower level;if at all.
I hear ya, I didnt have a single trade on the futures side, ended up switching to trading options on AAPL so that I would not have wasted the day trading and close with some profit today at least... ES/YM just went nowhere today for me, there were a few opportunities when ES kept going against 92-93 and finding resistance, but that was just about it.. very sideways today for me...
when you see the day like this where it is clearly sideways, do you stop the series or just keep on until you get your profits eventually? curious...
No, once committed I will stay with the trade (series)...in this case I was in two minds whether to commit as the price pattern looked absolutely ugly.
I committed ,because I did not know that it would remain that way (who does) and it had been in excess of 12 hours, so I thought there would be a reasonable chance it will break out.
Ok..have closed out both trades at 8475...yielded a small profit before comms.
Missed first trade from a +10 by 2 ticks!!
Reason i closed out is that I am going to be carry unnecessary exposure at series 3 whereas I can achieve virtually the same result by reverting back to series 1...
This trade has gone on longer than 24 hours and no outright result...so I am taking a hit on comms for a total of 29 contracts against profit of 1.25 points..
The second set was completed +10...1 contract...this of course is as a resultof default from yesterday.
Although if (I don't like that word in trading) I had left it alone from yesterdays sequence the profits would have been greater., but then again I would have been forsaking the exposure of the 1st set up which was in excess of 50 % chance of being stopped out eventually.
Bottom line...not what you make...it's what you don't lose.
Trader
The following user says Thank You to Family Trader for this post:
At the end of the month I will make a few comments related to trading and hopefully try to offer some useful advice related to 'funding' a strategy and survival.
Not everyone will like it,but if it helps 1 trader, I will be happy.
Trader
The following 2 users say Thank You to Family Trader for this post:
... and a decent math guy can calculate those ratios without major problems... most traders are drilled on math.. if not... 
and my other model, which is generally more erratic romped in...
