Possible New System

Click on the chart to get an animation!

I have been a little busy lately, but I have had time to work on a new system. The chart shows what the system's potential could be. One thing that many people would struggle with is that the system runs on a monthly time frame. It should do nicely for my super fund.

I'll post some more test info when I get a chance - got to go.

stevo

Weekly Systems

In response to a recent question and stealing from something I did sometime ago...

Advantages of long term weekly systems;
1. Big money comes from big moves. Some of the biggest winners in the Australian market took several years to develop.

2. Less trades, less mistakes (although I still seem to manage!). Less trades (or trading) does not mean that less money is made or that less money is committed to the market. I am often fully invested.(I spent 6 months out of the market last year!)

3. Less time required (although the more capital the more time it takes). Much of my time is spent researching systems and strategies (not lately though - just trading). I also work, although my hours are quite flexible.

4. Reduced noise. Weekly charts allow the trader to stand back from the market and see the bigger picture. When I am on holidays I will often only check the prices on the weekend to see if any exit signals have been triggered.

5. Liquidity becomes less of a problem. I can buy or sell a stock on more than one day in a week, just as some might buy or sell several times through the day to get the position they want. I will buy up to 8% of average weekly volume, although I rarely do.

So weekly systems suit me, although each to their own.

I use the All Ordinaries index (around 500 stocks) as my universe of stocks.

The number of trades that trigger is dependent on the trading system used, the time frame and the number of stocks scanned. One of the systems I am currently using ranks the trades. I limit myself (in this system) to the top 4 stocks in the list. Another system allows discretion - flip a coin, look at the fundamentals, consult the stars, whatever, to make the final selection from the possible trades presented.

I use 1% risk position sizing. I don't worry too much about portfolio heat - I can easily have 20 trades running, although some will be below 1% risk due to lack of volume.

My biggest problem lately is adding extra money into the portfolio when it becomes available. I have been looking into the future and position sizing based on capital that will become available in the next 6 months from other sources.

I'm off to Europe for a while,

regards
stevo

Cheap netbook & Amibroker

I loaded Amibroker onto a small 10" Kogan Agora Pro laptop to see how it would go. I had no problems installing and running Amibroker on the netbook - not all that surprising except it's running a version of Ubuntu linux called gOS. It just installed using Wine without any hassles.

It's not all trouble free, help and the editor seem to have some bugs, but as a small cheap travel computer to monitor a system it would work quite well.

The laptop itself is running surprising well - 2gb ram & 160gb hard drive for $439 plus postage is not bad. The wireless is not as powerful as my Dell but works ok. Considering that you can pay twice that for an iPhone it's quite impressive. Whilst it won't make a phone call it does come with Skype ready to go and a webcam built in - I'd like to see Amibroker run on an iPhone!

The screenshot is of one of my current trades, FXL. It's a very nice trade so far, although it's not over yet.

stevo

Animating Trades

Stevo - just playing around. If you click on the chart above you should get a slideshow of some of my current trades.

stevo

PAN trade and an update

PAN was nothing spectacular but at least it made some gains. I re-entered this trade when the buy signal was triggered a week after I sold it. This system ranks the trades and I just take them in order so I have less decisions to make.

There has been a few sells in July as the market wobbled a little - some winners and some losers. Other sells included DYL, MMX, ETC, DOM.

Trading started up again back in January 2009 when signals started to appear. I was cash before then. With longer term systems it's usual to only realise loses in the startup period - winning trades tend to last longer whilst losing trades are cut short.

Over the last week substantial gains have crept into the portfolio - the market is looking promising. I am pretty well fully invested.

stevo

At Last!!!

At last I sorted out my software to handle another cash account and put in all my back contract notes since September 2008. The following charts are based only on trade profits and losses. Interest and some dividends will help take the edge off the year, just a little bit.

Yearly performance shows that I gave everything that I made in 2007 back in 2008. Such is trading. 2009 is shaping up ok at the moment, at least the calender year will. It would be nice to present the data in financial years.



The equity curve suffered more than it needed to as I put significantly more money into the market over the last 18 months.

I am close to fully invested at the moment. Best trade this year is CUS.

stevo

Profit to Risk - current portfolio

I thought that Profit to Risk on current trades was a good way to see how the portfolio was tracking. The chart shows actual trades in the market.

A profit to risk of -0.5 would mean that the trade is half way to the maximum risk for the trade. So if risk was $10,000 then a profit to risk of -0.5 would mean that the trade is down $5,000. A profit to risk of -1 means that it would be time to sell.

This portfolio is showing some promise. I have some buying to do today.

Since I changed bank accounts part way through this financial year my records are in a bit behind, which is why I haven't been reporting portfolio performance (or lack of) on the blog. I have to link another bank account to my cash book in Stockmaster, whilst not losing data from the old account. I am sure that it is easy to do but I haven't worked it out yet.

Thanks Comsec for complicating my record keeping and adding an extra bank account to the mix! They have a set up where I have a Cash account and an Investment account. Everytime I make a trade I have to remember to transfer the correct amount from the Investment account to the Cash account so the trade can be settled. If I buy a few shares and sell a couple over a few days I have to do the maths and make sure that the correct amount is in the account. If I try to maximise interest I have to transfer the funds on a daily basis. If I am short then they charge a $50 plus fee even if there is millions of dollars in the Investment account, although if I ring them they supposedly waiver the fee. I have had to ring them once this year already.

I should have left things as they were rather than chasing a little bit more interest. I was 100% cash and an extra 1% (or something like that) seemed worth it at the time.

Enough of my complaining.

stevo

SBM sell signal

Another sell for the system. I acted on this on the monday following the signal. This weekly system is only just starting to get back into the market. I will probably only be selling losing trades for a few months.

The most promising trade in the portfolio is CUS. It was purchased back in January 2009 and is most of the gains in the portfolio.

stevo
Please note: I am not making any recommendations above. This blog is historical by nature - not real time in terms of trading.

RMD sell

RMD looked promising, for a while.

stevo

Failure to act

I have really beat myself up on a failure to act on a sell signal.

I have used the excuse that I sold most of them so it's not such a big deal. But I am far from perfect – I stuffed up. It's easy to see the mistakes others make, but it's harder to accept failure in oneself.

I sold 2/3rds of BKN way back in September 09 when the signal was given for an average price of $9, but there was a part of the order just sitting there at the end of the week. I am out now for a substantial loss.

I guess I learned something. Experience can be the worst way to learn, but maybe sometimes it's the only way. Maybe someone will learn from my mistakes.

stevo