Need Guidance - TA/Momentum Based Strategy

[barney]

Ah I wouldn't know how to write down a record when it's based on gut feeling as no two days are the same. I don't understand how you guys have set defined setups. But then again you guys are the profitable ones and I'm the utterly hopeless non-responder with an IQ of 7 so I'll just shut up

LOL ... I hear you Sam.

Re "Trading Plans" ........... The best trading plans are those derived from "experience".

Having to write down and test a myriad of mathematical possibilities to prove what may or may not work in the future has not been a method I have personally found productive

However ... Screwing up, then realizing why you screwed up (it took a while!) .... then trying "not to do the same thing next time" has proven to be the greatest trading plan I have found

On that note ..... To be successful ...... If you like Stocks, Paper trade ..... or if you like Futs/ Forex, Sim trade with dedication and honesty until you learn what does and doesn't work ...

In my own "very humble" opinion ..... Its best not to complicate things too much no matter what you are trading Cheers.

 

[Rypieee]

It seems that while my TP is based on discretionary variables, there are some constant factors to it. Lets take my risk management aspect for a second, there are component within that which could be back tested to see if the strategy used is more beneficial to having differing factors.

Because I am reviewing my TP in real time against my personality, its hard to know what you are really like until you start trading real money - for me anyways, a dummy account, as honest as I can be on it, wouldn't yield the same emotions as a real-live account. I am still making certain decisions to adjust my risk tolerance which is up to an individual. I thought I was able to handle a 1% drawdown of my total PV per stock but I am starting to understand that 1% is a little too high for my liking. I have fine-tuned it down to 0.7% to see how I go with that.

I use Stock Doctor as my research tool and my maximum risk allocated to a stock is based on the fundamental soundness of a company - Triathlete will know this one. My max risk per stock used to be 1% for strong or satisfactory financial health, 0.7% for early warning and 0.5% for marginal or distressed financial rating. But after 2 months of using the financial health model as my backing, I am changing it to 0.7% for strong, satisfactory and early warning ratings and 0.5% for distress and marginal ratings.

My main goal right now is to stick to my trading plan, clarify any loose statements on my TP so that I know exactly what action is required in the moment, fine tune my portfolio & risk management techniques and experience the market.

The goal would result (logically speaking) a more developed trading plan attuned to my personality, some experience for myself in the market on what I see (what works and what doesn't) & exceptional portfolio & risk management techniques.

Portfolio & risk management is the number 1 step for me because if I don't have a sound plan for P&R management, I won't last in the market.

My winning ratios at the moment is 40% win 60% lose - not good at all but the idea is that if I can control my risk well from the start, I can focus on how to increase my winning ratio as the next important step. Truth to be told, my "Scanning" abilities are sub-par at most and there is still a long way to go in that department - hopefully, through my experiences and self-education through books, I might be able to improve it.

Long run - Controlled P&R management + Improved stock picking abilities means better profitability, even if it's from -$1000 to -$100 hehe

Do I need to back test my TP? Well it may be good to do it but having experienced a pretty crap P&R management with sub-par stock picking abilities between March 16 to Dec 16 I still managed to pull a tiny profit from the market. I am somewhat confident that an improved system will yield better results! Only time will prove me wrong haha

 

[Trembling Hand]

It seems that while my TP is based on discretionary variables, there are some constant factors to it.

Do I need to back test my TP? Well it may be good to do it but having experienced a pretty crap P&R management with sub-par stock picking abilities between March 16 to Dec 16 I still managed to pull a tiny profit from the market.

I think you will find in any sort of cobbled together disc. back testing or real time forward testing the biggest influence on your outcome will be market phase. Nothing in your trading plan can influence that only manage it.

Be wary of bull market results.....

grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.

 

[Rypieee]

I think you will find in any sort of cobbled together disc. back testing or real time forward testing the biggest influence on your outcome will be market phase. Nothing in your trading plan can influence that only manage it.

Be wary of bull market results.....

Noted about the Bull market comment, Tech/a and Canoz put me in my place back in Mid 2016 for not acknowledging the bull market period in 2016 haha, I shall be careful with market phases.

 

[tech/a]

Yeah sure you can test ideas but you are kidding yourself if you think a trading plan thats discretionary can be anything but forward tested in real time.

This could be said for all types of testing.

My winning ratios at the moment is 40% win 60% lose - not good at all but the idea is that if I can control my risk well from the start, I can focus on how to increase my winning ratio as the next important step.

Your results are common for a long ---longer term system. For better win rates shorten your time frame or lengthen your stops. Both have balancing consequences.

I think you will find in any sort of cobbled together disc. back testing or real time forward testing the biggest influence on your outcome will be market phase. Nothing in your trading plan can influence that only manage it.

Be wary of bull market results.....

A high tide floats all boats except those with holes in them.