Example of my conservative trading strategy

[tech/a]

Best ask an Elliot Wave practitioner to number beyond 1 but I will get you started. The first peak is number 1.

Id respectfully suggest they not be lazy and read the link I posted over the next few weeks.Then have a go themselves.
Could possibly be any worse than the count suggested.

 

[Wysiwyg]

Id respectfully suggest they not be lazy and read the link I posted over the next few weeks.Then have a go themselves.
Could possibly be any worse than the count suggested.

Thanks. Am always keen to learn and where possible help others.

 

[Chris45]

This is a good thread lukeaye and an excellent example of how we can perhaps learn from each other. There should be more threads like this. I like the way you're giving the details of your analysis so we can follow your thinking. Great stuff!!!

 

[lukeaye]

Best ask an Elliot Wave practitioner to number beyond 1 but I will get you started. The first peak is number 1.

Thats how it is labeled? maybe me writing the numbers to the sides of the waves, has mislead you, for the purposes of the graph i have labeled to the sides of the waves rather then at the peaks, it looks clearer to me.

 

[kam75]

Hi guys, thought i would share one of my strategies for the market at the moment. this is a conservative strategy i use, i will often pyramid with my positions, but i feel now is not the time to do it. This one of my low risk entries i took yesterday, i didnt want to hindsight, but i dont think im allowed to show it at the time of entry, as ASIC dont allow it? anyway this is more of a help thread for those who want to see what a strategy can look like. feel free to critic, im happy to hear anyones opinion. So as i said this is not a gloat look at me im making money thread, its only intended to show how a simple strategy may look.

TRADING DIARY

STOCK; AMP.asx $6.11 28/9/09

REASON FOR TRADE; Stock has completed a-b-c correction in 4th wave, and is currently sitting on support. Rule of alternation complied with (EW). Banking and financial sector still looking strong with good momentum. Price oscillator confirms weak pull back. moving average confirms, volume confirms. Market conditions have pulled back, presents at this stage as low risk entry position. Although monitoring of broader market will need to be looked at for evidence of a reversal.

ENTRY STRATEGY; Bought at current levels of $6.11. Support has held and can therefore be safely bought off this level, with expectations of a 5th wave advance. Initial stop loss can be put at $6.02 cents.

EXIT STRATEGY; Half the position will be closed at resistance of $6.60. The rest of position will be left to run to $6.98 with a trailing stop then moved to $6.56.



DATE ENTERED; 28/9/09
ENTRY PRICE; $6.12
EXIT PRICE;
DAYS HELD;1
PROFIT/LOSS;
EVALUTAION OF TRADE;

Like your strategy and the thought you put into your planning of the trade. Can i ask whether you use some form of guide or software to plan your trades?

I mainly trade breakouts and patterns but lately in this market haven't been having much luck. A lot of trades that just don't follow through and a lot of false breakouts. Not much of a fan for buying on support though.

 

[lukeaye]

Would you prefer if i labeled like this? i only labeled the other way because the software on IG isnt that good and it gets to cluttered otherwise

 

[tech/a]

No I actually agree with you.
Its very weak.
Strong possibility of hidden selling.
Tommorows price action will reveal.

What is the course of action now with AMP?

My count with some AGET help for MCR is shown here
https://www.aussiestockforums.com/forums/showthread.php?t=17069&page=9

Post 178.

 

[lukeaye]

Well neither my target, nor my stop have been triggered. Todays price action was what i expected, although i didnt think it would drop quite that much. very light volume confirms my belief. so i will hold the position, at this stage, along with all other positions.

 

[lukeaye]

I still favour upside in the broader markets at the moment though, i mean from a fundamental point of view, there are some bad reports comming out, but it is evident there is still a strong support of buyers lukring, this market still wants to go up. In my opioin, all technicals lead north still.

Another thing that is doing my head in, is Paladin. I havent posted that entry yet, but i prob should, ive been sitting on that for weeks now, and still no move. anyway covering this stock at all? its given me 2 false breaks down and up. its confusing the hell out of me.

 

[johnnyg]

I would do it by analysing the methodology, not the results. 50 is an insignificant sample if we're looking at results, but it's plenty for analysing methodology. Try to determine whether your trading philosophy is sound. It's hard to do without an experienced person looking over your shoulder, but you might get good feedback on a forum.

Tar Mr J. When I hit my 50 trades ill start a thread.

 

[tech/a]

Paladin
Support at $4.40
Price action looks like Distribultion.
Personally I would be looking for a breach of the most recient high.
Better opportunities else where.

But thats just a personal opinion.

 

[lukeaye]

Thats why i bought, with targets of 6.00 i still think it was a relatively good entry given where i could buy in and put my stop.
Although, im thinking i should prob be pulling out now, capital best put elsewhere as you said.

Murphys law will get me though, ill get out and it will shoot up.

 

[aramz]

Just posting this again in case it was missed at the bottom of the previous page:

'i'm just trying to grasp a few things here. You mention discretionary trades and systematic trades. In order for Lukaye's trades to become systematic what guidelines should he follow?

Would he go about a similar method but focus on certain trades that have been successfull and input these certain indicators and search criteria which have made these trades successfull into a code for a custom scan? Would he then scan away and when the criteria is met he enters various trades and then meticulously records all aspects of the trade?

I am just trying to understand what you are saying about how to improve Lukaye's current trading approach by making his methods more systematic.

Would he need to use a trade manager type system aswell as software and then backtest? Would this in turn make his method faster more efficient and 'systematic'. Am i on the right path here in interpreting you analysis of his trading approach and how to better it?'

Any reply from Tech A or someone else would be much appreciated as i've always wondered what is required to take discrentionary trades to the next level....

Cheers

 

[tech/a]

Just posting this again in case it was missed at the bottom of the previous page:

'i'm just trying to grasp a few things here. You mention discretionary trades and systematic trades. In order for Lukaye's trades to become systematic what guidelines should he follow?

Anyone trading systematically would have a sequence of trading rules from entry to stops to exit to trailing stops to Position sizing which when applied to each trade over an extended period of time would on completion of both winning and losing trades have a net profitable result.(That's the plan--and that's what most do for a few trades until either the pain gets to bad or their initial winners keep them a float until they notice that their profit has evaporated).

Would he go about a similar method but focus on certain trades that have been successful and input these certain indicators and search criteria which have made these trades successful into a code for a custom scan? Would he then scan away and when the criteria is met he enters various trades and then meticulously records all aspects of the trade?

Yes if long hand.
The only records he need is win/loss,string of losses,draw down,Expectancy IE $ profit / dollar invested.

I am just trying to understand what you are saying about how to improve Lukaye's current trading approach by making his methods more systematic.

No I'm not saying that but can see why you think I am.Lukaye has no idea if his ideas if traded time and again will be net profitable.He doesn't know if his method is a short or longer term method. whether he needs to skew his trading to more winners with less R/R or less winners with More R/R.(Return on Risk).See its just an idea (Lukayes trading method.). So he needs to understand WHAT MAKES a systematic approach---or set of trading principals--profitable. When you spend hrs testing it soon becomes pretty apparent what you need to do in your formulation.

Would he need to use a trade manager type system as well as software and then back test? Would this in turn make his method faster more efficient and 'systematic'. Am i on the right path here in interpreting you analysis of his trading approach and how to better it?'

Sure that would be very beneficial.Its a long path one I have and still am involved with. My testing software is excellent and my skill level is very mediocre compared to other code experts (not that I'm anywhere near code expert status).But I can and do design excellent profitable methods. My software can test 50000 various portfolios with any given set of parameters on 10 yrs of data in 7 different bourses in around 5 mins. Something that you'd die trying to do by hand---only to find out it wast profitable!!!

Now once he comes out at the end of that and knows how to STRUCTURE a profitable trading methodology he will be well prepared to trade in a discretionary manner.

Its all well and good to be an expert in analysis but APPLYING it in a profitable trading method is far harder than the 2 minute experts would have you think. Even those with years experience in charting or Elliott or Gann or Fib or pattern trading or fundamental trading struggle to understand HOW to APPLY it.

Its normally a jumbled mass of ideas which have no chance of being profitable,because they are NOT being applied in a way which will skew the results in your favor.

That's about as clear as I can get!

Any reply from Tech A or someone else would be much appreciated as I've always wondered what is required to take discretionary trades to the next level....

Cheers

Hopefully that now is crystal clear.

 

[professor_frink]

back on topic please folks.

Lets give this thread a chance to develop into something useful and leave the theory for other threads

This one of my low risk entries i took yesterday, i didnt want to hindsight, but i dont think im allowed to show it at the time of entry, as ASIC dont allow it?

ASIC won't give a rats about your individual trades, feel free to post in real time from now on if that's what you want to do.

EDIT: I've gone and cleaned this thread up in the hope it will get back to what it should be

 

[shortlist]

back on topic please folks.

Lets give this thread a chance to develop into something useful and leave the theory for other threads



ASIC won't give a rats about your individual trades, feel free to post in real time from now on if that's what you want to do.

EDIT: I've gone and cleaned this thread up in the hope it will get back to what it should be

Great idea for a thread lukeaye - don't be discouraged. I'm enjoying following it - though last time I looked at AMP they weren't looking too amazing. Keep posting anyway - I'll do the same when I'm up and running for real because I think this is a great way to show how theory can be applied to practice, etc.

 

[lukeaye]

Hi guys,

I closed all of my positions this morning on open, profits accross the board apart from gold. I would keep posting, but now that i have downloaded amibroker, im trying to devote as much free time as possible, to learning how to use it. so i wont be able to keep this diary up as much as id like to at the moment.

Looking at the markets at the moment anyway, i am sitting out for now, as there is no real clear direction, volatility is high, and in my mind to hard to read at this stage. once the market shows me some more signs of clear direction, i will look at posting some more of my ideas.

Good luck trading everyone!

 

[aramz]

Thanks for the in depth reply TechA.

 

[danno75]

Luke,
Thanks also from me with posting this thread, I have just downloaded Amibroker and am still trying to get to know the program. I am a long way behind you in terms of knowledge but threads like this show more of the basics and theory without being too complicated which is what I like to read. Hopefully I can post something similar eventually for some analysis.
Top the others who have commented and offered their opinions thanks also and keep it up its what newbies like me need to be reading, rather than in depth highly technical stuff that is often a bit much and blocks out the simpler areas.

Danno

 

[tech/a]

Well neither my target, nor my stop have been triggered. Todays price action was what i expected, although i didnt think it would drop quite that much. very light volume confirms my belief. so i will hold the position, at this stage, along with all other positions.

Fair enough then not 12 hrs later---not even another days trading and this-------

Hi guys,

I closed all of my positions this morning on open, profits accross the board apart from gold. I would keep posting, but now that i have downloaded amibroker, im trying to devote as much free time as possible, to learning how to use it. so i wont be able to keep this diary up as much as id like to at the moment.

Looking at the markets at the moment anyway, i am sitting out for now, as there is no real clear direction, volatility is high, and in my mind to hard to read at this stage. once the market shows me some more signs of clear direction, i will look at posting some more of my ideas.

Good luck trading everyone!

A trading method turns to panic and saving face---NO METHOD.
Point made.
Losses are common place----its how you deal with them.
NOTHING had changed from your post the night before only your mind set.

My posts are seen as harsh and confronting---when trading like this is seen people need stark reality not pussy footing rubbish.