Friday, January 29, 2016

A good start to the February series - Day Trading: Jan 29, Intraday

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Today is the first day of the February series. A big outside bar in the initial minutes was confusing. Then, when the price fell back into yesterday's range, it started to look like a range-bound day.

Unlike the past 2 days, I tries to be relaxed with my entry, focusing only on visual clues. After my long entry, the price moved pretty much one way. There were a couple of deep pullbacks that came close to my trailing Stop Loss, but no damage done. In my mind, this is how the Range Compression Trading System is supposed to behave - that is the whole purpose of having wide Stop Losses. The icing on the cake - the auto square-off exited me close to today's highest price

Got my second century since I began posting on this blog. Been a long time coming. The last century trade was on November 18th. On January 13th and January 14th, I was in trades with MFE of 125+ points, but they were booked for less than 100 points.


Nifty M3 Candlestick Chart


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Thursday, January 28, 2016

The other side of the Hill - Day Trading: Jan 28, Expiry Day Intraday

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Today was the expiry of the January series. Took 4 trades - all losses today. This series has been good overall. I have been able to earn 402 (gross) points from 50 trades in this series. For most of the series, I followed the Range Compression Trading System on the M15 charts. In fact, I have not done any changes to this system since January 8. Trade entries are discretionary based on small M15 bars. Stops are mechanical, and are deliberately wide.

That is a kind of a record for a System Hopper. In fact, I also attempted to capture the spirit of the system in Trading System Rules. All that's only because the Trading System hasn't had a major drawdown yet. Now, that we are on the other side of the hill, things could be different.

Look at the profits per trade - it was increasing until the middle of this month, and then kept decreasing and has been negative for the last 2 days.



Profits by Trade and Cumulative Profits: Trough and Peak


The major crib about the Range Compression Trading System is the mechanical exit. Since January 8, the average intra-Trade Drawdown has been approx. 24 points per trade, including the 34 point Trade Drawdown in today's Trade 4. That means on the average, in each trade, I exited 24 points (0.30 %) away from the MFE (Maximum Favorable Excursion) of that trade.... and remember, this is an Intraday system, and 50x0.30% = 15 %  

There seems to be some problem in getting the interactive data in the Trading Stats page. For now, I have pasted a few screenshots on the Trading Stats page.


Nifty M3 Candlestick Chart


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Wednesday, January 27, 2016

Beware of Inside Days - Day Trading: Jan 27, Intraday

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Today's trades


So my daily winning streak has conclusively ended today - I can no longer masquerade that the streak is still on when viewed from a different perspective.

Took many trades that I would not have taken if I had restricted myself to discretionary visual entries. Visually, there were no signals for Trades 1, 4 and 6, but when I saw that the risk was only 10-11 points, I took them anyway. Trade 1 was too important to leave, because it was low risk entry early in the day.


Analysis of the Trading Day


Am I back to my old ways, where I keep on taking trades, bleeding bit by bit to death? Let's analyze...

The shock defeat (Hehe...) gets me all bugged up, and getting into the analytical mode to fix my faults. Was it my fault? Did I do anything different, than what I have been doing over the past days? Was the day itself different from the other recent days? Was I just lucky to have been in that winning streak?

Then I finally find the answer looking at me in this chart. My last loss in points terms was on Jan 8, before the winning streak took off... and look at just how similar today was to Jan 8. Jan 8 and today were the only inside days during this period.


Analysis of Trading Days: Inside Days



Ok, this chart analysis is a joke. But seriously, I don't think that I did anything different today from the other days. It's just that I did not get a entry that stuck and took me to profit. Need to watch the current system's performance on similar days.



Nifty M3 Candlestick Chart


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Monday, January 25, 2016

Bounce, Graze, Crack, Crash - Day Trading: Jan 25, Intraday

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My point-wise daily winning streak, as shown in the Trading Stats page, stays intact.

(See I now need to qualify the winning streak with so many criteria... the real winning streak on my ledger, stopped last Thursday)

There was the crazy first bar in Nifty Future, but I was not even logged in then. Since I have decided to take my trade at or near the end of the M15 Candlestick Bar, I can afford to log in late. After I got my first trade, the Short entry, Nifty drove me crazy by not doing the crazy moves. It was bounce, graze, crack and crash, and then I got my profit. The Storified version of the first trade is on the Tweet timeline on the left pane of the website.

The second trade was a Long trade, entered 15 minutes before square-off. As I have been doing in the past few days, since the first trade was a winner, I entered the second trade with a larger quantity. Luckily, this one did not do much damage, though it initially gave a scare right after entry. So far, every time I have entered a second trade with a larger quantity than the first trade, I have lost.


Nifty M3 Candlestick Chart


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Friday, January 22, 2016

Sometimes it doesn't work - Day Trading: Jan 22, Intraday

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Here's the big secret that I want to share. The rules of the Range Compression Trading System that I shared a couple of days back - them don't work all d time.

In the second trade today, I had a Trade Drawdown of 31 points giving me a loss of 13 points. I followed all the mechanical Stop Loss rules, and was in that trade for 126 minutes. Just like yesterday, after the first winner, I took the second trade with a larger quantity. So, while my daily winning streak up to 10 on the Trading Stats page, in reality, it was a loss today. Not a good feeling after all these days of profit, but I will give it some time before I start System Hopping again.


Shakeouts - the worst type of Stop Loss hits


Both the SL hits were of the worst kind - the Shakeout - where the Price eats the Stops and then immediately reverses direction. This happened to me very frequently in December. I was also shaken out a few times this month, including yesterday.

Today's shakeouts... well, you could call them bad Stops, but for me these were just the same mechanical Stop Loss rules that I have been following for the past 2 weeks.


Nifty M3 Candlestick Chart



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Thursday, January 21, 2016

Good day, but not too good - Day Trading: Jan 21, Intraday

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Today was another volatile day. The trading range in the first hour and in the last 2 hours was large, and did not give me opportunities to get in. My only space was in the mid hours - managed to earn some points in that period, but not too well.

The first Short trade, after an initial threat to my Stop Loss, dropped well. I booked +47 points out of the MFE of 78 points. My mechanical trailing Stop Loss got me out at a Pivot Peak

The second Short trade was in the making for a long time. I got in at almost the Lowest Price of the Day, and had my Stop hit almost immediately for a loss of -15 points.

So, out of the 78 points that I had, I managed to hold on to 32 points (before costs). What makes it slightly worse, is that Trade 2 was with a higher quantity than Trade 1.

My daily winning streak is now up to 9


Nifty M3 Candlestick Chart


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Wednesday, January 20, 2016

The Hunted ▄︻̷̿┻̿═━一 - Day Trading: Jan 20, Intraday

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Yesterday, I defined the motto of the Range Compression Trading System:


Say NO to small profits, Say NO to big losses.

Today, I will elaborate it a bit further... a supplementary motto:


Be the Hunted

These are on-the-fly rules. I am winging it, until the entire revelation is complete, or until I dump this system (more likely)

In this game we play the hunted. We don't hunt the Price. We stay away from the Price - with a wide Stop Loss. We let the Price hunt our Stops. Price might hit our Stops a few times, but many times it will get exhausted by the effort and slink away. That's when we win.

When we do get hunted, we are not fatally hurt unless we make a big loss. Stick to Motto 1, and you will just have minor wounds.

Today's trades

Gap down, then a bounce (something to do with dead cats). I got my chance to Short there, but Price hunted the Stop Loss down. First Trade, initial Stop Loss hunted. Price had tried to catch my SL a couple of times before it succeeded, and then exhausted by the effort, it fell down.

There was another Short trade that I wanted to take, but luckily did not place. That would have been a loss, if I had placed. Lucky me!!

The second trade - another Short - was the day's winner, but not before Price attempted to hunt down the Initial Stop Loss. The exit was a nice Trailing Stop, I guess, except that I gave up a lot points till it hit. Price went zooming up after the Stop Loss. This win keeps my daily winning streak intact - 8th consecutive win today.

It's just irks that I need to give up a lot of points when the Trailing Stop Loss hits, but I can't complain about the results though, yet. I guess I will have to wait for more revelations...


Nifty M3 Candlestick Chart


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Tuesday, January 19, 2016

Boring Profits - Day Trading: Jan 19, Intraday

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This is getting dull, boring, uninteresting... It's been 7 trading days since I had a losing day. It's boring to trail SL slowly. I work in the exciting world of day trading, not in some dull office. I deserve more excitement than this!! Check out my live tweets on the left pane of the web page. I only get to update my Stop Loss, and that's it.

The current trading system - the Range Compression Trading System* - is performing remarkably better than my (loser's) psychology. While defining the system rules for this system, I only had one motto:



Say NO to small profits, Say NO to big losses.

So, initially, I do not get to move my Initial Stop Loss for a long time, because I do not want to move it into a position that may potentially result in only a small profit. Better to have the price comeback and challenge me at my Initial Stop Loss. That way the market is chasing me, instead of the usual other way round. This way I get to avoid multiple entries chasing the market. Also, I ensure that I have sufficient buffer before I make the first update to the SL, to avoid premature exits. So, it's a long wait until I get to move my SL to lock some profit........ consistent with the motto for the Range Compression Trading System.

After that, the System Rules don't care. The motto only tells me to reject small profits... it does not tell me to lock the biggest profit. So, I have some snail trailing rules, that drag the Stop Loss slowly. Usually, if the Stop hits, I give up a lot of points that had been in my MTM. But I don't care. I don't want to give up my boredom just yet... I'll wait until the losses kick in, to change the system.

Did I complain too soon about the Trading System :eek:

 *Range Compression Trading System - Ugh!! Need a better name for this system... Suggestions please.


Nifty M3 Candlestick Chart



Trading Stats


I began trading the Range Compression Trading System on Jan 6. At that point, the Stop Loss trailing was more aggressive than at present - as can be seen in the charts of Jan 6 and Jan 7. On Jan 8, I modified the Stop Loss placement and trailing rules to make it slower. I see a remarkable change in the Trading results since then. I have marked these dates in the graph below.


Profits of the Range Compression Trading System




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Monday, January 18, 2016

Breakeven day - Day Trading: Jan 18, Intraday

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I continued with the same Range Compression Trading System that I traded last week. Entries are discretionary, and Stops and Trailing are mechanical.

It gave me 2 trades. The first long trade hit the Stop Loss in 2 minutes. The second trade - Short - hung on for a long time, before breaking 7400. I moved my Initial Stop Loss after 105 minutes, and the Trailing Stop was hit within the next 5 minutes.

There was another shorting opportunity in the afternoon, that I decided not to take. It would have been a good one, if I had taken.


Nifty M3 Candlestick Chart


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Saturday, January 16, 2016

Opening Range Breakout - Day Trading like a Swing Trader

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Opening Range Breakout or ORB Day Trading System is my perennial favorite. It is one of the simplest profitable Day Trading System that I have traded. It is a Day Trading System for the non-Day Trader, the busy executive who doesn't have much screen time, the Taxi Driver who places trades by phone without charts, and the student who doesn't bother about the intraday intrigues of the market.

I know because I was like them - place quick entry orders as soon as possible after Market Open, and scoot to work, and not bother about the market for the rest of the day. The result of the trade could be be checked at the end of the day anyway. And much to my surprise, money would keep coming - day by day, week by week, month by month... until the time disaster struck - like it always does.


Opening Range Breakout - Image Source: pixabay



Augubhai's ORB Trading System


Here are the basic steps of the system:
  1. Define an Opening Range Period - 1 minute, 5 minutes, 30 minutes, or even a Range.
  2. After Market Open, wait for the Opening Range Period to be completed.
  3. Place Stop Loss Entry orders, at the High and Low of the Opening Range
  4. That's about it... except for the exit. You get to set your own exit logic - If I was busy with work, I would try to wait for a few minutes for the entry to trigger on one side, and update the other order to place the Stop Loss at a calculated optimum value from the Entry Price. (For an Opening Range of 1 minute or 5 minutes, the entry usually triggered quickly. Else, canceled the orders, if the Opening Range was wide)



There are a number of methods for trading Opening Range Breakouts, the most famous of them is perhaps Tony Crabel's formula. Many of these methods are for scalping the Breakout or booking profits at targets. My method is more a fire and forget for the day - with a wide calculated Stop Loss, targeting the maximum, but taking whatever the market gives - Day Trading with the attitude of a Swing Trader.

I had given an outline of the system on the Traderji forum, and am pasting that verbatim below:
 
http://www.traderji.com/amibroker/52959-augubhais-orb-system.html#post540835
To answer the queries above - this is a simple intraday ORB system. ORB stands for Opening range break-out.

We decide on a period to watch - it could be the first 5, 10, 15, 30, 60 minutes - anything that you decide. Assuming that we decide that the opening range period is 10 minutes. At the end of 10 minutes, place a Buy Stop Loss order at the day's high(+filter), and a Sell Stop Loss order at the day's low(+filter). The filter need not be a big number, otherwise you could lose some part of a good move.

If the Buy Stop Loss gets triggered, you could either decide to leave the the Sell Stop Loss unchanged or modify it to a fixed percentage or a trailing Stop Loss. It is up to you to decide on the stock, filter, and method of Stop Loss once you are in position.

The premise is that we make the most profits during trending days. Generally, on trending days, the Open and Close are at near the extreme ends of the daily range, with minor pullbacks. So once you are in position, if you set your Stop Loss to avoid pullbacks, then you would get the most of a trending day with less risk. The key here is to decide on the Stop Loss. The Stop Loss will vary from stock to stock and period to period. The AFL will help you backtest and decide on the Stop Loss.

With whatever backtest I have done, the maximum returns were when there was no stop loss. Obviously, that is more risky, and I never trade without a Stop Loss.

This is not something new that I discovered. You will find so many ORB systems on the internet. What I want to share is that I have been profitably trading this system successfully for many years now - on NIFTY and recently on Bank Nifty. (Sometimes there have also been very serious whipsaws as well).

This is an Intraday method that does not require any charts. You just need to know the day's high and low at the end of the opening range period. You also do not need any AFL, except for backtesting.

Hope this answers your queries.



Rationale


The rationale for this system is already mentioned in the snippet above. It is to capture days when the open stays near one extreme (High or Low) of the daily candlestick bar. The number of such days, and the potential points to be made trading this system on such days is huge. Around 60-70% of the time, either the day's high or low is made within the first 60 minutes. If the Opening Range is 5 minutes, then this number reduces to around 20%, but you get to capture more points when you win (Don't take my word for it - Check these out on your charts, and see what's the percentage that you get. This is not very difficult to verify.)

Again, here's my post from Traderji:

http://www.traderji.com/day-trading/89936-opening-range-breakout-orb-intraday-trading-system.html#post867878
OK, here's the thinking behind my method of ORB...

Open the daily chart. How many bars do you see that open at one end and close at the other end? If we capture even some of those bars, could we be in profit?

I traded this mechanically, but if we are smart, we can get better results.



Warning


So, everything is hunky dory so far. But then comes the twist in the tale. You get to win only around 20% of the time. That means that for a random series of 100 trades, there is a 18.5% chance that you could have a continuous losing streak of 20 trades (Check this out with a Streak Calculator). Will you be able to handle this sort of a losing streak? I certainly cannot, at least not at this point - which is the reason that now I don't trade Opening Range Breakout the way it is described above.

Opening Range Breakout or ORB is my first and favorite Day Trading system. My first love. It is with ORB that I had my first Day Trading success - months of big profits, and then I was hooked. Then it all went bad in a few days - poor Money Management being a major reason. There is need to be aware of the risk of huge drawdowns trading the system mechanically as described above. Use it at your own risk.


Trading Systems


I am kicking off this series of posts on Trading System and Methods with my notes on Opening Range Breakout. These are just notes and not a comprehensive review. Maybe, I'll flesh out more details about this Trading System as I continue posting...





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Friday, January 15, 2016

Sankranthi - The account travels north - Day Trading: Jan 15, Intraday

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Today is Sankranthi, the day (incorrectly?) believed to be the day the Sun starts its northbound journey. My account started the northward journey earlier this week. Here's how my trading performance chart for 2016 looks:


Profit per trade and Cumulative Profits


I stuck to trading the same Trading System for the whole week (a mini-record for me) - Discretionary Trading entries based on Range Contraction in the M15 Candlestick Chart, and Mechanical Stop Loss Placement with very slow trailing. That's because I haven't hit a big drawdown with this trading system yet.


Intra-Trade Drawdown and % Booked

 

On an average, in a winning trade, I had a Maximum Favorable Excursion (MFE) of +69.90 points, and I booked only +42.23 of those points. That is a profit booking of 60% of MFE. For large moves, that's a lot of potential profits given up. The average Trade Drawdown (TDD) was -34.14 points. That is 49% of the average MFE, and 81% of of the average profit booked. A very inefficient trading system. This has been the characteristic of the system this week. During my visual backtests, it was not so. In the backtests, I would enter a trade and exit it and the end of day on most days, leaving very little profit unbooked...

But the weeks other Trading Stats - a Win Rate of 82% (9 out of 11), and a Payoff Ratio of 3.28 are quite impressive.



Date Position Result MFE TDD
01/11/16 Long 23.50 39.35 -15.85
01/11/16 Long 46.30 74.20 -28.80
01/12/16 Short 21.00 41.35 -20.35
01/12/16 Short 5.30 33.70 -40.70
01/13/16 Long -9.80 1.40 -11.20
01/13/16 Short 75.35 125.90 -50.55
01/13/16 Short 19.95 50.00 -30.05
01/14/16 Short -15.95 15.95 -31.90
01/14/16 Long 95.00 127.10 -32.10
01/14/16 Short 20.00 40.00 -41.95
01/15/16 Short 73.70 97.50 -46.90
Total
354.35 646.45 -350.35
Average
32.21 58.77 -31.85




Today's trades

 

Today's trade was a long grind - the longest of my trades since I started this blog. I entered the trade on the second M15 bar with a 20 point Stop Loss. Ideally, I should have entered on the third M15 bar with a tighter Stop Loss - in which case I would have made a loss. The market ranged and the trade dragged on for a long time - I had to wait for exactly 255 minutes before I could move my Initial Stop Loss according to the Mechanical Stop Loss trailing rules. In the interim, I was the proverbial 'Bakre ki Amma', expecting my trade to be slaughtered any moment. The trade ended well... the price went South, and the profits went North.


Nifty M3 Candlestick Chart



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Thursday, January 14, 2016

Another good day, Week's good - Day Trading: Jan 14, Intraday

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Market went gap down, then up and down again. This has been a week of crazy moves - big ones at that. So me made small money out of it.

For today's trades, I had my inhibitions about entering trades 1 and 3 - both the short trades - because the Stop Loss for them was wide. However, given the large bars painted by the market yesterday (that caused me to stay out of the 150 point move up), I had to take my chances. With the current Range Compression Trading method, I would prefer narrower ranges though.

Trade 2 - long trade - was a clear one. That one flew 127 points from my entry. I booked 95 out of those 127 points. That's better than the 75 out of 126 that I booked in yesterday's downmove. Percentage of potential profit booked (Intra-Trade Drawdown) will remain a concern with the current mechanical Stop Loss trailing method, but I plan to continue since the going's been good this week. Check out my Trading Stats page - it's a resurrection going on there.


Nifty M3 Candlestick Chart


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Wednesday, January 13, 2016

What goes down, must come up... - Day Trading: Jan 13, Intraday

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Trade 1 was a mistake. At 9:55, I thought that the 10:00 AM bar was complete and entered long. That trade broke this week's 100% win record, because the next 2 trades were winners and the winning streak would have continued.

I was in 2 minds on whether to reverse to Short on exit of Trade 1, because one of the objectives of keeping the entries discretionary is to reduce the number of trades. I decided to SAR that one, and it did good - until the exit that is... the price straying out of the way just to eat my Stop Loss . Another reason for entering that Short trade was that Range Compressions in the morning are beginning of some of best intraday moves. The third trade Short was also an iffy one - I would have preferred a narrower range congestion for entry. In both the Short trades, the Stop Losses were trailed mechanically, slowly, and left a high percentage of the profits on the table.

Completely missed the V-reversal move to the day's high, because I did not get any signal per my Range Compression Trading System (discretionary entry rules). On the 300 pointer day, I have made less than 100 points. That's ok, I guess. That's what this new trading system is for... to prevent me from doing too much. And tomorrow is another day. For today Estoy Contento


Nifty M3 Candlestick Chart

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Tuesday, January 12, 2016

Patience - Day Trading: Jan 12, Intraday

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2 short trades today. The first trade was easy. Booked a profit. The second short entry was on a deep pullback, just like yesterday, except that it didn't work as well. I continued the same Range Compression Trading system that I traded yesterday - with entries based on discretion, but Stop based on a Mechanical Trading formula. The Stop Loss - which was the Pivot High above my entry - never moved.

The current winning streak count is up to 4 now - see the Trading Stats (Yes, even the last trade counts as a win in my book). Overall though, I am yet to make anything good in this month. Have just been able to dig myself out of the hole that I was in.

The rewards of patience - would have been nice if it were better, but it's better than some other days when patience doesn't pay, and instead takes away. Anyways, patience kept me out whipsaws in the range bound market zone today.


Nifty M3 Candlestick Chart


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Monday, January 11, 2016

Estoy Contento - Day Trading: Jan 11, Intraday

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Today turned out to be a good trading day. Again, I traded the discretionary version of the Range Compression Trading System - with the entries being discretionary, and the initial stops and trailing stops being mechanical.

This was the kind of day where there were directional moves - the kind of days that I missed on every occasion in December - for example. That is also the reason that I am trying out a slower trailing system (A System Hopper will give any reason to justify his behavior ☹)

There are a couple of advantages of using a slow trailing system - ask the Trend Followers. One that is obvious is not getting shaken out of a good move as often, and then you make some profit, if the move doesn't return back deep. The other is that the number of trades are reduced, when I stay in the ride longer. If I tried exiting at maximum profit, I would also probably be looking for a fresh entry after the exit. And how many times do entries actually give good profit? "The secret of success is to find a good thing and stick to it" said the glue.


After a gap down, the trend was up today. Both my long entries were on deep pullbacks in today's trend. The slow profit booking, left a lot of money on the table. There are disadvantages of the slow trailing method, but am not writing about those today. ¡Buenos Días! Sorry about being loco, was watching Spanish videos during the trading hours.


Nifty M3 Candlestick Chart



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Saturday, January 9, 2016

Why is Bitcoin a store of value?

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Is Bitcoin the next Gold? As I tried to allude in my post about the Value of Nothing, nothing's ever worth it - philosophically, as well as in reality. We seeks stores of value. We need to agree on a common store of value to have the store be of any value at all. So, it's our agreement or perception about the store of value, that create value for that store - the store in itself does not have any value - be it gold, or paper/virtual money, or Bitcoin.

Why is Gold valuable? Perhaps, for the same reason for which Diamonds are valuable, or Tulips, or Dotcom stocks, or works of modern art. Why is paper money - printed by people who don't have it, and backed but nothing but words - valuable? Well, that's because we all agree to trust those words, and sweat our brows to earn that money.

What happens when we stop trusting those words (deservingly, but to our detriment)? Russia happens, Zimbabwe happens, and now Venezuela is happening. Currencies get devalued so much that people have to find some physical use of that paper to get some value out of it - like burn it to bear the winter cold... (and you get other ideas)

China crash happens, there is a rush towards Bitcoin. Greek Euro Crisis, there is a run towards Bitcoin... and Gold as well. Better not to trust the fiats behind those fiat currencies, because those fiats could change anytime. Gold has been a mighty store of value for centuries, and so the expectation is that it will continue to be so for a few centuries more...

But why Bitcoin? It's of recent origin, not much history behind it. It is a destabilizer of the current monetary environment that is controlled by Governments - so, Governments might clamp down on it. It is created by the mumbo jumbo of some geeks (OpenSource, I know), that common folk are just expected to believe (not unlike when they are told to trust fiat currencies). It is not a physical entity - it's value is in some string of binary bits. Arbitrary. So, then why is it in demand?

One part of the answer is clear. People move towards Bitcoin, when their faith in alternative value stores decreases. The move is away from the untrustworthy Dollars and Euros to Bitcoin. Now Bitcoins are not trustworthy either - but they are an alternative to the other untrustworthies. And given the limited supply - anything of value must necessarily have a limited supply - and speculation, the price rises.

But the question remains - why should we begin valuing something at all? Especially, something whose only purpose is to have value? If a group of people then come around with what they define as a similar or better store of value, should we not trust them? The only trick (or strategy?) is get people to perceive value, and then have that perception gain momentum as more people jump into the bandwagon. But again, why not Tulips? Or those sea shells that I found on the sea shore? Absurd queries, but blog I must.


Bitcoin Euro - Wikimedia - Image Source: https://en.bitcoin.it/wiki/Promotional_graphics



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Friday, January 8, 2016

2 losses - Day Trading: Jan 8, Intraday

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2 strikes, and I was done today. Did not wait for the third strike, since I was stricken enough.

Bad market to trade. I put my entries according to my visual judgement of Range Compression (Discretionary Trading). The Stops for the Shorts were wide enough both the times, but got hit. The third opportunity (marked on the chart), could have been a chance, but I judged it as not to be taken.

Drawdown continues... like in December.


Nifty M3 Candlestick Chart



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Thursday, January 7, 2016

Another Cliffhanger - Day Trading: Jan 7, Intraday

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Today was going ditto like yesterday. I had one loss initially, and then there was the cliffhanger. In yesterday's cliffhanger, the price climbed the cliff slowly, and then crashed. Just like yesterday, I did not move my initial Stop for a long time. Today, I at least I managed to make some, but isn't it peanuts given that China froze itself again today - Shanghai and Shenzhen Composite hit the circuit breaker again.

Both the Stop Loss hits... them bad hits.
Why is my stop a magnet for the market? How does the market know my stop?


Nifty M3 Candlestick Chart




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Wednesday, January 6, 2016

Did not get any, again - Day Trading: Jan 6, Intraday

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Today, I traded the Range Compression method, that I had mentioned on my charts on Friday and Monday. It was totally discretionary trading. So, I did not rely on any mechanical trading signal - remember, I had traded this same method mechanically in November.

Did not lock the one profit that I could, because I want to lock at least 20 points, and that too with some buffer. The only good thing - if i may say that - is that my Stops got me out before major moves in the opposite direction.

I traded the M15 chart, but have posted the M3 chart, because the M15 does not look that interesting :lol:


Nifty M3 Candlestick Chart
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Tuesday, January 5, 2016

Ranging Day, made a loss - Day Trading: Jan 5, Intraday

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It was a ranging day, that I kinda read, but could not trade... Today, I traded 100% discretionary - everything was decided visually. No mechanical trading rules at all. System Hopping continues...

I also added squiggly lines on my chart, just to add to the general confusion on it. The Yellow Line is the Volume Weighted Average Price (VWAP), and the other lines are the 1st, 2nd, and 3rd Standard Deviations (1SD, 2SD, 3SD) of the Price from VWAP.

Since it was discretionary, I just decided to make commentary notes about my trading, since unlike mechanical trading, the rules and logic can be shared.

Intraday 'Live' Commentary


Nifty M3 Candlestick Chart



9:20☄ Opened slightly higher, well within yesterday's range. Slow slide down. Nothing to do.

9:55☄ Tested 7800. Insignificant volume. Ignored. Bounced well from there, and went to Day Open.

10:35☄ Reversed from Day Open. Had good volume when it breached 7800 Spot (10:48 Candle). Signal to get ready for action.

10:57☄ Waited for 7800. Hoped for a double bottom. On touch on 7800, placed long trigger at high of 10:45 candle. That did not trigger.

11:05☄ Broke 7800, but also broke Day's Low (LOD) and Yesterday's Low. Not the Double Bottom that I had hoped for. So, decided to wait for Pullback (PB) to 1SD to short. That too did not happen.

11:12☄ Entered Breakout Pullback (BPB) short at 7787. Price stalled immediately after my entry. That's so irritating, mentally. Doesn't allow me to feel like a person who knows what he is doing. IRRITATING.

11:24☄ Bounced up, but my Stop Loss did not trigger. Turns out that I made a typo in my SL trigger. Anyone want proof that I don't know my stuff ☹

11:35☄ Touch of 1SD happened (should have here waited for first entry?), and price stalled. I placed a (Stop and Reverse) SAR order above the 1SD pivot. Then price fell, and broke LOD. Should I feel happy, should I feel stupid, or should I feel smart that i did not allow market players to take my SL? Planned to trail pivots at 1SD with Target 3SD, changing SAR to SL.

11:57☄ SAR'ed to long, because it looked like a BOF of 7800, though Spot 7800 was still above it. SL at LOD.

12:17☄ Volume appearing again when approaching Spot 7800. Not much volume today around Futures 7800. So, is Spot more relevant than Future today?

13:15☄ Congestion just above Spot 7800, at 1SD. So, placed SAR below it.

13:18☄ SAR hit. Now short. Dirty congestion above. Price may want to come back there.

13:22☄ Spot 7800 cracks, and... free fall. No, BOF... WHAT THE. Put a SAR above 1SD pivot.

13:45☄ It played dirty. SAR'ed couple of time. What am I thinking? I am taking this 1st Standard Deviation line as a reference. If price squiggles around it, I squiggle with it. I win if it moves away from the line. If it doesn't... Aah! the pressure on my brain...

14:17☄ Done for the day. Tomorrow, is another day...


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Monday, January 4, 2016

Chinese Shakeout - Day Trading: Jan 4, Intraday

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Nifty attempted 7950 in the morning and failed. Then the fall started. Mid-morning Chinese markets hit circuit limits and scared Nifty into a fall.

I  followed the same rules as on Friday - entries only on Breakout Failures and Pullbacks of Round Numbers. The Shanghai Composite scare helped the first short trade into profit. My Stop Loss trailing rules remain mechanical. The trailing SL of the first trade 'unfortunately' triggered, and that did it. The first trade was followed by 3 losses. If the trailing SL had not hit at that point in the first trade,the mechanical trading rules would have captured the remainder of the fall. It was an easy downtrend day for someone trading sensibly, but I bound myself by my rules.


Nifty M3 Candlestick Chart

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Saturday, January 2, 2016

Partial Day Trading Statistics of Q4 2015

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This page contains the day trading performance statistics that I had recorded from October 30 to December 9, 2015. It is to archive the data that I had already collected and updated on the Trading Stats page.

This data is not very useful for the following reasons:
  1. I was trading a mishmash of trading systems during this period - both mechanical and discretionary... just the compulsive System Hopping that I do. Initially, the number of daily intraday trades were few, but later on increased in number. So, this data does not help much in evaluating or even comparing different trading methodologies and systems.
  2. Crucially, I stopped collecting data when I hit a bad losing streak, and had a huge drawdown. Probably, the most important focus of such stats is to identify and fix the weaknesses of the systems, and in that regard this data is useless. The Ostrich Syndrome of trying to ignore losses does not help.
I hope to be updating the Trading Statistics page with fresh data in 2016...



Day Trading: Profit by Trade and Cumulative Profit

Day Trading: Profit by Trade and Cumulative Profit




Day Trading: Profit and Loss by Long and Short Trades

Day Trading: Profit and Loss by Long and Short Trades




Day Trading: Statistics by Intraday Trades

Day Trading: Statistics by Intraday Trades




Day Trading: Profit and Loss by Intraday Trades

Day Trading: Profit and Loss by Intraday Trades




Day Trading: Trendline - Profits vs. Holding Period

Day Trading: Trendline - Profits vs. Holding Period




Day Trading: Consolidated Performance Statistics

Day Trading: Consolidated Performance Statistics




Day Trading: Performance Report by Day

Day Trading: Performance Report by Day







Click here to go to my Trading Statistics Page





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Friday, January 1, 2016

First trade of the year - Day Trading: Jan 1, 2016 Intraday

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My year starts with a whimper. I decided to go slow this month... the thing to focus on is to reduce the number of intraday trades (especially the losing ones ☺). I decided to do discretionary trades today, because with mechanical trading systems, the number of trades often goes out of control... I usually don't put rules around the maximum number of trades per day.

For today's discretionary trading, I considered 2 systems. One was the range compression system, that I traded in November. The version of the range compression trading system that I traded in November was mechanical, and resulted in large number of trades on some days. If I had used it to trade today, I would have used discretion to limit the number of trades. Those possible trades are marked on the candlestick chart below.

The other trading system - the one traded today - is totally visual for entries, and based on Decision Point Trading. I decided to be very slow about the entries today, and consider only the Breakout Failures and Breakout Pullbacks of Round Numbers. The only entry that I got with it today, resulted in a loss of 6 points. For trailing Stop Loss, I had decided to be mechanical, and move my SL only if I could lock in at least 20 points. Else, I could easily have tightened the Stop even in this trade.

Appreciate if you could comment about the trading today.


Nifty M3 Candlestick Chart

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