Yes, that strategy is 4 for 4 for me, including catching about a $1.00 of that down-move yesterday in CL. (with only a .10 SL) Honestly, unless/until the dynamics of the crude market change, i think that is going to be a consistent winner. Just need to make sure to spot when and if that tendency changes. Thanks again for clueing me in to that approach -- ive research and tested A LOT of different approaches -- almost all of them more complex and a lot less successful than that one.
When I finally figured it out I was pissed about the 20+ books I read on technical analysis. I wish I would stick to it more but im so damn bias right now and trying to catch a huge swing down.
CL has got to be the market i've gotten killed the most in due to biasness. I'm def bearish on CL too and that is why i got crushed three weeks ago in a big way.
HuggieBear has pounced upon today's opportunity- Currently 200% short via equities, specifically SCO, QID and SDS. Currently unhedged, although i might pick up some calls hedging me in at the recent highs. My strategy for the near term is to play this as a range bound market, playing 5% swings up and down. Right now I'm modeling 4/5/2004 as the equivalent to today. (yes i know past is no predictor of the future, but its not bad for drawing some statistical reference) So, I'm short until 1080 on the ES. I'll watch recent highs exceeded by a bit, but only because i'm going to hedge myself. I don't see it happening in any meaningful way though.
In order to do this, you've got to have a rules-based system where the discretion is in one or more of the rules. For example, an entry rule such as "enter on breakout of a significant s/r area in the direction of the underlying trend". The part in quotes is the discretionary part. Now suppose the rest of the rules are mechanical. You do a fair backtest where you scroll through and identify your entries. After that you apply the rest of the mechanical rules to those entries, giving you your backtest results. From this you build your probability distributions. You run a monte carlo sim with your probability distributions and get lots of good information on how your system should behave.
It's time for a weekly HuggieBear update. Due to bad choices, bad intuition, and poor execution, I've entered a significant drawdown. Current damage is about 11% of total portfolio value. That still leaves me up about 12% on the year, however 11% damage in one week is not good. Primary causes of said damage: 1) Attempting to swing trade against the prevailing trend. - Although I picked a stop out point, i didn't properly size the trade with risk in mind - No swing trades against the prevailing trend. And certainly NOT BEFORE THE REVERSAL HAS REARED ITS HEAD 2) More dancing with the devil. The dark delight of CL siren song is what calls me, and I've no business with it. Primarily because i work...need total focus for CL and I can't offer it. Changes for next week: -- swing trading only in the direction of prevailing trend (for now) -- CL only via intraday automation -- Refine automated futures index strategies -- Focus on capital preservation The good news is I have stemmed the bleeding before I did too much damage here and while still positive for the year. Now the key is to right the ship and continue the march toward a +50% year. ciao HB2000
HuggieBear managed to have a good week, in spite of this market wackiness. After the prior weeks mistakes, I resigned myself to becoming much more cautious and i mostly stuck to my guns last week. Stats as of week end: +8% Gain for the week -6% Current overall drawdown +15% on the year thus far Very limited trading last week, but also exceptionally lucky. Focus was on three areas: 1) +3% trading CL - I promised i wouldn't do this, but i did it anyway. But only on Tuesday, and I got lucky and went undefeated. I again suspended discretionary CL trading at the close of business Tuesday. Could have just as easily went against me. 2) +4% automated trading (ES & CL) - New systems are running live at very small scale (.25% risk). 6 wins, zero losses last week. Expected win rate is only about 60%, so it was a lucky week. Was not planning on getting any return out of this burn-in period, but the trades this week actually did contribute. 3) +1% Swing Trading - I'm having a hard time finding trades I like in this market, but on Thursday I did pick up some UNG and some SKF. I just feel that both are due for a bounce and so far the trades are working in my favor (please, no comments about UNG i know exactly what its good and bad for). Game plan for this week is more of the same (except for the CL bit). Run the systems in low-scale mode to get a baseline of the results, and look for opportunistic swing trades. I'll also be looking for any decent market selloff to get long some names. HB
Weekly Huggie Update- A wish-wash week, not much action, not much progress. I am more or less flat versus where i stood last week. The action breaks down as follows: 1) Still traded CL several days in high-frequency and ridiculous size. Came out slightly ahead, but with massive MAE. Promise i'm off the sauce now. 2) Automated systems -- i run them all via Ninja, and have been having horrible reliability problems with NT and my broker. Got a patch from them today which looks like it might fix the issue, and that will be a game changer. Anyway, Auto systems were negative for the week, but most trades were missed due to connectivity problems. 3) Swing trades -- I closed my NG trade up 2% on the position. Thank god. It plummeted soon afterward. My reason for closing it was simply not liking the bounce action off the oversold, and then i looked at NG prices this time last year and it looks like we could visit low 3's. NG is fucked. SKF i took a loss on. Down about 4% on the position but that was only a .8% portfolio loss. I'll wait to buy back in once i see things get bearish. Overall, i'm having difficulty finding swing trades and/or day trades in this market. That's ok -- i expect things to heat up after quarter end. The jobs report is likely to be a major catalyst either bull or bear, and i will try to capitalize on the resulting trend. HB20000
Why have you stopped hanging out with this noob? Come back and my gang will give you a good rub down.
Oh, I'm still hanging out, I'm just lurking. I work full time and I keep getting myself into trouble discretionary day trading CL. I do pretty good and am profitable most of the time, but every once in a while i get distracted or lose focus and let a big loss run. Anyway, i'll come back and post a few of my automated intraday trades...that seems to be going pretty well