plyka
Registered: Nov 2007
Posts: 181 |
06-18-12 05:48 PM
Quote from miniFORTUNE:
Hi ZRITRADER:
Are you entering on a cross of some sort, From your win rate it looks like a trend following system ?
Reason I ask is because you need to find a way to enter with limits and exit with limits as much as possible, the comish and slippage are the big factor here. Backtest results usually give false hope to folks who haven't been around the block for a few years.
In my experience trend following systems I have built with code have only done OK on longer timeframes because of the reduced slippage/comish factor.
Good luck anyway.
Good points!
Yes is a trend following but not on time frames but price movement. I do not use the traditional charting.
As far as limits on exits (SL or PT) did not show good results on Crude. The losses (very common) are minuscule but when CL moves, profits are unlimited and take care of losses and may be slippage, etc.
You are right as far as longer terms. I know from reading that Oil Companies and Transportation establishments make billions of dollars trading Crude on WEEKLY and MONTHLY CHARTS. They have millions on risk capital, programmers, robots etc.
Personally, if I had the funds, will not even trade the Crude. I will just buy a strangle on crude every month. It cost between $ 6000.00 to $ 7000.00 for the put and call on Crude. Month after month, for years Crude moves more than $ 6. Case in point, the Jul and Aug options profited more than $ 24.000.00 so far. Anyhow, hindsight and wishful thinking.
Back to reality. Waiting for the results on the Greek election. It is so much at stake.
Best!
miniFORTUNE
It's really not possible for such a strategy to be profitable for any long period of time. Markets are not perfectly efficient, but they are efficient over time. If such a simple strategy was profitable, it would only be such for a limited period before the options were repriced to correctly factor in volatility. All the above trade is is a long on volatility, so what you're saying is that the options market in crude is stuck eternally in underpricing volatility, which simply can't be correct. If it was correct, then you would be a billionaire in no time. You said it yourself, a $6k margin resulted in a $24k win. You don't have $10k? After a year of trading such a goldmine, you'd be a billionaire.
Trading is no where this easy. You seem a bit new to the game. I would give it a few years of making real money before talking about getting funding from somewhere.
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