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Dump it Here

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Everyone finds their own style of trading, or investing. I personally choose to Trade and invest. My investments are time driven, meaning minor blips don't really effect quality long term investments

It's the perfect time for an investment update
Investing is all about the time in the market. By investing in good quality companies that pay dividends you'll not only enjoy those dividends but the capital gains along the way.

The capital gains over the last 2 1/2 years
The dividends accumulated along the way & the spin-off from BHP are not included in the results below. Other than capital gains, I regard any other income from these investments to be the icing on the cake. In the five holdings below, an investment of a million dollars should generate approx 80k to 100k annually give or take a few dollars.

FMG is a recent addition (it's early days)
It doesn't take blind Freddy to work out that red is not my favourite colour but in the early stages of an investment cycle it's irrelevant. Investing in quality companies has always been proven to be a successful strategy. Market timing in the short term can affect your portfolio in the early stages of building such a portfolio but nothing to worry about until it gets out of control.

There is an old saying, "give it time"
With Investing, short-term price fluctuations are meaningless throughout the investment cycle as "father time" is the edge. Wealth creation takes time so "give it time" to do its thing.


Investing.jpg


Skate.
 
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Trade and invest
Everyone finds their own style of trading, or investing. I personally choose to Trade and invest

To balance out my posts today I'll make a few posts about trading
Being an investor as well as a trader gives me the ability to make a few general comments on the way I see the differences & nuances when it comes to both methods of wealth creation. Wealth creation can be generated either way or by a combination of both.

Investing is a slow methodical
Whereas trading generates wealth so much quicker. To me, trading & investing isn’t about getting rich, it's more about financial independence. Using both methods supports my lifestyle. Financial freedom should be the aim for everyone so you can live your life on your terms.

Living life on your terms is what life is all about
The only person who can make sure you’re able to live the life you desire "on your terms" is you.

Skate.
 
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Let's address the elephant in the room
There is a big downside when it comes to trading because you're up against traders who will have more experience, more information & much more money than you, so you will need to concentrate on your survival. Your absolute first goal should be to "learn how to stay in the game", that's your number one job, it's your most "important job" by far.

Successful trading
Successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got fu¢ked first. You need to mentally prepare yourself to accept losses & on occasion prepared to accept a few larger losses as losing is part of the trading game. How you handle your emotions will ultimately decide if this game is for you.

Skate.
 
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It's complicated
First off, when it comes to trading or investing there is a financial risk in chasing wealth creation. When you first "have a go" at trading or investing it won't take you long to find out the level of risk you are willing to accept. This level of risk is already built into your DNA & it varies between individual traders.

There is a difference between Trading & Investing
In both cases, evaluating whether a position represents a good level of "risk/reward" is essential before you jump into any position. There is a difference between buying into great companies & investing in great companies. Both go about capturing profit from a different perspective of a price trend. A lot of money can be made doing both regardless of the aspects of the ongoing businesses.

Skate.
 
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Traders try to capture the small price trends within a long-term trend
Whereas investors "over-time" hopes to capture the full price trend discarding the minor fluctuations in price along the way. But with both styles "position management" is critical. Recent times highlight the importance of managing positions whether you are a trader or an investor. Without correctly managing your positions a "Set & Forget" strategy can sometimes be fraught with danger. The markets aren't kind it doesn't matter how good your preferred method of trading is, not limiting your drawdown using either method is not acceptable in my books.

To those who are reading this thread due to the title, may I suggest you look at the weekly systems in @Skate's "Dump it Here" thread. I fully endorse Skate's systematic trading style.

I believe it's time for me to hop off the soapbox
But before I do, I appreciate the recent kind words from @peter2 endorsing "systematic trading". If you can nail this style of trading consistently you'll be able to live a life of financial freedom. I know this is another meaningless catchphrase but I truly believe "if I can do it" anyone can do it. Education was my key, make it yours.

Soapbox Capture.PNG
Skate.
 
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Crikey!
I don't know how any Mechanical System/ Formulae can Operate with large GAPS in either direction on the open. In my mind if all the Mechanical Statistics don't cover LARGE GAPS in either direction I think they should be thrown overboard without hesitation. The only solution as I see it is to Claim the Trade or Trades were a Medium Term Investment and maybe even a Long Term investment if the situation gets worse and say "I Never Lose"

ASX plunges today wiping out $60bn
The Australian share market had its biggest daily drop in three months after Wall Street got hammered yesterday. The news headlines correctly reported the loss traders experienced today but it wasn't the same for everyone. Sure today was emotional for some but as usual, there were positions that were relatively unaffected.

System traders are not all the same
As a matter of fact, we trade our own systems & strategies. I had made a comment in a "PM" that on Monday I had "28 Buys" & "8 sells" as all my indicators were pointing to better days ahead.

The "Frogs on Toast Strategy"
On Monday this strategy had "10 buys" & on face value, this strategy has been relatively unaffected by today's rapid decline. I'll post the signals & a small Excel chart to plot its movement over the last 3 days.

# This week Amibroker Exploration Signals
Trading in this manner couldn't be any simpler. As it displays (a) what to buy, (b) the number of shares to buy & (c) the offer price in the pre-auction.

Mondays Exploration Order for Frogs on Toast.jpg


# Some trade using the Amibroker Backtest Portfolio feature
I'll post the Backtest Portfolio as some prefer to trade using this method. I prefer the Exploration Analysis method as it can be coded to give as much information as required. Both supply the same signals. The biggest difference is the way the calculation is performed.

Mondays Order for Frogs on Toast.jpg


Excel Spreadsheet
A snapshot of how this week's signals have performed.

Mondays Order for Frogs on Toast Returns.jpg


Summary
Sure today was bad, but not for everyone.

Skate.
 
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Give trading the respect it deserves
There are myriad reasons why someone would start investing or trading in the markets. Basically, those who enter the market can be categorised into two groups, (1) hobby traders & (2) those more dedicated. If you fall into the latter group your survival in this game is achievable. Those who fall into the hobby group usually believe trading will be easy & it's not. I'm just saying, if you keep treating trading as a hobby it will quickly become an expensive one.

Consistency comes from having a plan and sticking to it
Most of us start out trading knowing very little "which is a common trait" amongst new participants trying their hand at this game. When losses appear that's when the penny drops. Fancy taking on a new venture & risking your own money with something you know little about "that's why it pays to self-educate".

You need to start out with a business mindset
Trading success mightn't flow straight away but with additional knowledge, perseverance, hard work, & a lot of dedication (PHD) will help to "keep you in the game". Once you gain the knowledge, "discipline & mental toughness" is a prerequisite to give yourself any glimmer of success as trading is a tough gig.

Skate.
 
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Amibroker Ranking is called - PositionScore
@peter2 acknowledges there are always more candidates than the available money & most times more signals than required to fill a portfolio. From my research alphabet ranking doesn't produce "bang-for-buck" neither does Radge's "Bang-for-buck" PositionScore.

The change in Superannuation rules
With these new changes from the 1st of July 2022 has allowed me to start a few more strategies. It must be a timing thing as they are all looking promising with the majority of them being in good profits. On Monday the "HighRoller Strategy" being a 10-position portfolio also had "10 buys" & to my surprise, it has been also relatively unaffected by yesterday's rapid market decline. I'll post the signals & a small Excel chart to plot its movement over the last 3 days.

PositionScore - Ranking signals
The "PositionScore" should be in line (tuned) with the results we are trying to achieve. "Skate's HighRoller Strategy" is one strategy that pumps out more signals than the system can take. The ranking just takes the lowest price security first, crude but robust with a breakout strategy.

System Trading
Coding a trading idea stands "head & shoulders" above all other tools that I have tried. Trading a "Mechanical System" is the simplest way I've found as it takes little skill & involves only minutes a week. If you can press one button you have the skill.

# This week Amibroker Exploration Signals (HighRoller Strategy)
Trading in this manner couldn't be any simpler. As it displays (a) what to buy, (b) the number of shares to buy & (c) the offer price in the pre-auction.

The exit strategy
The "reason" for the exit also paints a powerful story.

HighRoller Strategy.jpg


Excel Spreadsheet
A snapshot of how this week's signals have performed. The 10-positions entered are from the Amibrokers Exploration Analysis report. The simple idea of "PositionScore" means that you take the required number of positions from the top down.

Positions taken Monday - HighRoller Strategy.jpg


Summary
Sure yesterday was bad, but not for all strategies.

Skate.
 
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There's plenty of opportunities to get me fully invested but I'm a little skeptical as it's still a bear market overall.

It's the nagging question
What should we do? This question no matter the market outcome is never pleasant either way. If the markets perform disappointment sets in rapidly. Staying on the sidelines even though the market performs as expected (negatively) but the positions under consideration to buy took off, immediate anger raises its ugly head. No matter what decision you make "the law of averages" means you'll be wrong 80% of the time.

One common method to compound profits quicker (aggressively) is to allocate a portion (%) of the profits to the trade risk of the next trade. eg. If starting trade risk is $1000 and the trade makes $1500 profit, $150 (10%) is allocated to the trade risk for the next trade. Even a small sequence of winning trades will see the TR increase rapidly. This method needs to impose some limits, both on the upside in winning runs so that the TR doesn't become too large and on the downside in losing runs to reduce the amounts lost.

How to reallocate trading profits
This was the next topic on my list for discussion but after some thought, "I've done this topic to death" A quick search on "how do I allocate profits?" or "pyramiding my position sizing" will bring up more than a few posts on the topic if "new readers" are interested. There are also some graphics to explain how I accomplished this.

Skate.
 
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Musing while waiting for the markets to open
I still feel that there should have been a better explanation about "PositionScore" as one PositionScore doesn't fit all strategies (they need to be in tune with the strategy). The PositionScore can be one of the deciding factors for the overall profitability of any strategy.

At all costs
You need to get the ranking correct or you might just throw away a good strategy or trading idea. The PositionScore decides which trades should be entered if there are more entry signals than the maximum allowable number of open positions or available funds by ranking them in numerical order. In such a case, AmiBroker will use the absolute value of PositionScore to decide which trades are preferred.

Backtesting alleviates the need to guess
"PositionScore" affects only the backtest & optimization, this is the reason we need to add a filter, without an additional filter it wouldn't display the ranking in the Exploration Analysis. The "PositionScore" is important when it comes to the profitability of any strategy.

Bye
The markets are open.

Skate.
 
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Random thought. I recently read a trading book by Mark Minervini. First trading book I have read in maybe 6 or 8 years. I followed him on Twitter for interest. Apparently he has made 30mill of something like that from nothing. Anyway he tells us he is a big deal.
The book was okay and focused a lot on risk, big bases and tight stops.
The thing that struck me was he has 4 positions total unless a raging bull and then he uses margin to go to 8 positions (100%margin I think). I hold maybe up to 40 or 50 positions across three accounts when fully invested. You could only do this on the US market IMHO as there is much more liquidity (assuming a reasonable size account).
 
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Random thought. I recently read a trading book by Mark Minervini. First trading book I have read in maybe 6 or 8 years. I followed him on Twitter for interest.

I'm starting to like Twitter
I never really got Twitter as the format was not what I was expecting. I don't do social media but it certainly has its place to stay connected. I like to read tweets of Mark Minervini & The Chartist, an alternative way to stay motivated about trading.

An extract from Mark Minervini's Twitter Feed (17/9/2022)
"What a wonderful message to wake up to. My books and my work change lives around the world. Satisfaction beyond money".

Skate.
 
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"Average trader make a trade and feels good, great trader make a trade and feels nothing."

The Chartist (17/9/2022)
"The Chartist" reporting their current drawdown in dollars rather than percentages adds a level of emotion to trading. Kudos for displaying their results in this manner as it highlights how difficult trading this year has been.

Today's PnL: -26,178
Week PnL: -45,069
YTD PnL: -886,010

"Investing manifests itself in different ways for different people—one person’s prized strategy may cause another investor to shake their head in disbelief. We do, after all, swim in our own pool of personal logic".

Skate.
 
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Disclaimer
The information below in this post is not a recommendation or endorsement in any form but posted as a matter of interest for others.

As a matter of fact
I don't endorse any products or services that I may mention or have mentioned in any of my posts.

The Chartist has 2 new products about to be launched
There is one for those interested in system trading but don't have the skills or time to code a strategy, the other product is for those interested in having their funds managed.

Further information about the Chartist turnkey system can be found by clicking on the hyperlink below

Skate.
 
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Disclaimer
The information below is not a recommendation or endorsement in any form but posted as a matter of interest for others. As a matter of fact, I don't endorse any products or services that I may mention or have mentioned in any of my posts.

The Chartist has two new products that are about to be launched
The first new product is a "Multi-Strategy Wholesale Managed Account Service", a high conviction, high performance managed account designed to provide clients with outsized returns.

Impressive backtested returns
+26.74% CAGR over the last 5 years net of fees

The minimum Investment for the "Multi-Strategy Wholesale Managed Account Service"
Is $250,000

Skate.
 
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Disclaimer
The information below is not a recommendation or endorsement in any form but posted as a matter of interest for others. As a matter of fact, I don't endorse any products or services that I may mention or have mentioned in any of my posts.

The Chartist has two new products that are about to be launched
The second new product is an "ASX Swing Strategy". The ETA of the new ASX Swing Strategy turnkey release date is reported to be in a week or two for those interested & will be an addition to the turnkey line-up.

Multiple versions of the "ASX Swing Strategy"
There will be different versions of the strategy & the backtest results have been published. Also, it's interesting to read that "The Chartist" has already started trading a slight variant of this strategy.

The reported stats of a leveraged version of the new "ASX Swing Turnkey Strategy"

+31% CAGR with maxxDD -19.5%. (61% win rate)

The reported stats of an unleveraged version of the new "ASX Swing Turnkey Strategy"
+19.8% CAGR with maxDD -11%. (no win rate stated)

For additional information

Skate.
 
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"The Chartist" reporting their current drawdown in dollars rather than percentages adds a level of emotion to trading.

For balance
"The Chartist" today reported their current calendar drawdown of ( -$886,010 ) highlights how difficult trading has been. In @ducati916 post today "Mr flippe floppe flye" put that figure into perspective.

"This has been a very FORGIVING bear market and it has been quite mild in comparison to say 2002 and 2008. I barely know anyone who has blown up this year, just complainers bitching about 10-30% losses. If you’ve been long only and find yourselves down between 10-30% — that’s fairly benign is it not?"

Skate.
 
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"Invest trading" from the mouths of others
From @ducati916 post today "Mr flippe floppe flye" even remarked about the current “fu¢k you patterns” being experienced at the moment where one day the markets are surging ahead only to fall sharply the next.

Well blow me down
"Mr flippe floppe flye" has certainly a way with words, going on to explain one way he has found to trade these patterns. All you have to do is keep adding to your accounts into the dips & wait for the turn that he believes will eventually come.

But then there are others who say this bear market is going to be worse than 2008
Why? because the leverage is so much greater. It’s hard to reconcile it all & it’s especially hard to believe in the grimmest forecasts, mainly because the worst-case scenario rarely plays out.

Skate.
 
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Hi Skate, wouldn't it be safer to trade on a daily basis and leave no capital exposure overnight because of the uncertainty? We never know what the night will bring nowadays (although we do get a sense of what is to come, but never any guarantees that our judgement/ assessment is right)
 
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