Fishing

I decided to take one-month break from trading.

300% gains in one month will drive me crazy.
To focus back on project, getting distracted.

AT&T

Customer Q&A:

Testing

After return to trading pick new things:

Price trends is testing and establishing of boundaries
Spotting major trend is more important than timing
When price has problem hit TP trend weakening

Like other trading concepts, applied alone they probably useless. Applied together with collective knowledge they can increase edge.

Latest observation:
Price like to retrace to breakout/breakdown price

It happen so often across timeframes there must be some way to use this idea profitably. Maybe market give second chance to enter or exit. Maybe testing price level for confirmation. Dunno, to chew.

Updated 20th Dec:
Testing happens in normal or indecisive market.

In runaway conditions, price can breakout/breakdown successfully without retracing to break level. And never look back again.

DJ Call

A trade using principle of price pattern. Posted call to CNA.

Mon msn this pic to my shifu. Fri DJ hit TP.


Spotted NOBLE, bot 750. Rally to 2nd TP 1000.
Miss 3k profits from a setup with -$500 cutloss.

GOT SQUEEZED OUT (lousy trade management):
Bearish double tail candle and STI not following DJ
Double up at 760, fearful although cutloss faraway
Stop watching NOBLE to protect myself whipsaw
Next day NOBLE negate bearish rally to 800
Was already out following only the indices

THE LESSON:
When decide trade a counter, be prepare follow it some time after exit. You never know when price will reverse to the trend you originally trading for. When you finally give up in disgust, the counter will fly (with you outside).

Priorities

Been busy this month working overseas, trading, ta-course, blahblah.

Haven't contribute to Project B. This is not good. Deviate from plan.

Cut down on trading and blahblah. Sleep more (4h nights yucks!). Spend more time code-testing strategies.

Working overseas most of Dec, the TA course is currently booked till end of year. If you are interested, please let me know and I will ask my clients if they ok to combine sessions (special discounts).

Checkpoint 3

I quadrupled 3k capital in one month.

Big gains come from only 3 trades. Those with proper plan and execution. Daytrading (at night in/out kind) gave bad losses. And 13th nov stupidity when I long UJ DJ HSI NK against major trend.

THE LESSON:
Plan and clear idea of entry and exit conditions (for both losing and winning situations) before enter. Do not daytrade. Waste of time, energy and money.

HSI Call

A trade using principle of price timeframe.

Thu night DJ crash. HSI join in. I happen to long near the low.

Sold Fri earn 3k. Post trading decisions to CNA forum.

Telling friends revisit market mid Dec see got tradable trend or not.

Updated May:
Countertrend trade according to system. Strongly discouraged.

UJ Put

Working overseas this week. Tue night I look at market and saw this.



So happen UJ crash on Wed night. I close all and earn few k. Post trading decisions to CNA stocks forum.

Testing

Sorted research ideas, prepare for coding.

Top-down approach for programming (divide & conquer):
Divide difficult problem into digestible parts and build up

TREND RECOGNITION
experiment MACD with MMAs - simplify MMAs detection
bollinger height consolidate-breakout - detect trend inception
auto resistance (n-ma + deviation) - detect successful breakouts
acceptance and limits testing - access trend direction probability

PATTERN RECOGNITION
zig-zag to tell trend HHHL/LLLH - evaluation thru sampling freq
trendline, pattern recognition - denoising algo + data sampling

ENTRIES AND EXITS
reversal support thru symmetry - pattern + range algo + ma
exiting on breaking support - trend + pattern algo + ma

ARTIFICIAL INTELLIGENCE
market/sector/counter analysis - detect strong group actions
profit size/win rate analysis - position sizing and parameters

* explore AFL pattern/limits related functions

Updated Mar:
Pattern recognition and artificial intelligence not incorporated into System Z Prototype this time round. To develop as enhancements in Project B2.

Trend

My interpretation of trends after over a year in market.


Updated Mar:
Its impossible to predict the future until it actually happens. FA, TA, astrology, fengshui, insider tip, or any other methods, can up the odds but you can never be sure until after it happens.

Over long run, the axiom of cut losses short and let profits run will ensure the survival and profitability of a trader. This axiom goes hand in hand with trend-following; one cant exist without other!

EZRA

A trade using principle of price symmetry.

The only call I made in this rebound rally. TA help pick this runner.



Updated May:
System covered on first rally day but no long signal without consolidation. In this trade, discretional surpasses system.

Outlook

Close longs on Tue. This about all the rebound can tradably go. I suggest traders revisit market late Nov. Then we will evaluate if there is tradable trend. For investors, after Mar.

Till then, dont bother following stocks. I dont aim to trade all the time. But aim to trade when its reasonably safe to do so. I'm afraid its not now. Frankly, when I caught HSI < 11000 last week its safer than now.

Market may be in process of forming inverse H&S (currently left shoulder and head formed). Or may end up sideways to drifting actions.

Updated on hindsight:
The real top of the rebound is reach just 1 day later, after I long from low for 7 days. And market really rally hard after Mar. Besides systematic, discretional has its edge too. I havent figure out how to combine both profitably. I just got a new lead.

Research

Result of strategies research:

System Ideas
double-ma crossing indicate trend
multiple-ma crossing show movement

resistance (n-ma + deviation offset)
bollinger height consolidate-breakout

zig-zag to tell trend HHHL/LLLH
trendline, pattern recognition

estimate, confirm and evaluate
reversal strength thru symmetry

acceptance and limits testing
exiting on breaking support

market, sector, counter analysis
profit size/win rate analysis

System Parameters
system tolerance levels
noise, cutloss, deviation

moving averages
5SMA/12EMA/20EMA - near term
5SMA/20EMA/40EMA - short term
20EMA/50EMA/100EMA - mid term
30EMA/100EMA/200EMA - long term

Trading Concepts
noise removal
range expansion
consolidation breakout

physics laws of motions - kinematics
chemistry energy bands - multiple MAs

setups using sentiment cycle
weather/earthquakes forecast
scientific forecasting principles

the longer price action moves horizontal
the more likely reversal than continuation

Updated Mar:
Like what I posted, in R&D only a couple of ideas from the drawing board end up in the end-product. We wont really know what works until subjecting it to rigorous tests. Even then, what works in the past will definitely not work equally well (or worse) in future.

Advert

I'm going to shamelessly promote the TA Course until end of year (and less so after).

I caught HSI and USDJPY within 2% of bottom, making 150% gains in a week. This is my first trade for a very long time. I top Citibank Stock Challenge 2008 (long-only), making 68% gains in bearish September.

Learn how I did it and more by signing up for the TA Course.