Hello everybody, I am new here and this is my first post, although I have been lurking about for quite some time. I'd like to start my trading journal here for couple of reasons, but first let me give you some background on who I am. Basically, and very shortly, I started studying and practicing trading around 2 1/2 years ago, when I found myself without a job. Not a sad story actually, since I quit my job to follow my wife in her career around the world, and since I found myself unable to get a work permit I started thinking that learning trading could have been a viable alternative. I then went through all the newbie stuffs, reading tons of books (most of which chosen randomly) and starting practicing trading systems. I am very quantitative by nature, so I basically refused to even understand such things as price action, chart reading, patterns and so on, and I found myself leaning badly on trend following systems. To make a long story short, I have backtested my systems on a set of like 30 futures for the period 2007-2013, and then early 2014 I decided to go live. Or at least so I thought. The thing is, my systems often require to stay in a trade for up to 12/18 months (I trade on the daily data), and since I didn't want to jump on trades that were already started when I decided to go live, I basically sat along the river and watched the most wonderful trades develop without having the chance (or better, without giving myself the chance) to jump on and profit of them. The result has been that in these last 22 months I have basically been mostly paper trading, and the results of this testing are more than encouraging: with a starting capital of about 150k I would have netted something like 300k net of commissions and taxes, trading 28 futures, 1 contract of each. At the same time, my actual results were pretty poor, and so starting from this month I decided to jump on the boat. I set all the positions exactly as my system dictates me to, and I would like now to share my trip. The reasons for sharing are pretty basic: such a divergence between paper and actual results require me to focus on discipline and execution, and keeping a journal could be of great help in this. Secondly, while reading ET and other forums I very seldom found people taking the same approach as mine to trading (perhaps here I saw GAT and a few others, but differently from him I don't come from a professional trading background), and since I am a very humble person I started wondering whether I could have become crazy and taken a path that nobody would take. However, my backtested and paper trading results are there to prove that there is something to it, and hopefully I will be able to share this with you in the upcoming journey. In my next post, I will post my current positions. They don't change very often, and I don't plan to update my P/L on daily basis. I will do that mostly on weekly basis, even because the daily results are not really of my interest. LTT
Here are my positions (sorry for the capital letters, but that's how I have them in my excel file, and it would be too cumbersome to change them every time): AUSTRALIAN_DOLLAR -1 BRITISH_POUND -1 JAPANESE_YEN 1 SWISS_FRANC -1 NEW_ZEALAND_DOLLAR -1 SA_RAND 2 WHEAT -1 SOYBEANS -1 ROUGH_RICE -1 CRUDE_OIL -1 NATURAL_GAS -6 COTTON -1 SUGAR 4 COFFEE -1 COCOA 1 ORANGE_JUICE 1 GOLD -2 SILVER -2 LIVE_CATTLE -1 LEAN_HOGS -2
I started long term commodities in 1987, took some years to get it going right direction, and every few years make some major changes to it as I find what was always there. So I follow over forty instruments, and have changed it to where I am always in some direction based on past 9/25 years, longest trade direction been five years, many rollovers. Have found using options to hedge either getting in, adding or protect profits. Long boring way to trade, but that is where most of profits come. My original entry is never during a trend and never trail. Eventually added day trading to help on years where no overall movements in most sectors.
Today I cut my short position on Natural Gas from 6 to 3 minicontracts, and opened a short position in copper. Not a particularly brilliant moment here, since many trades are either on the brink of reversing (especially Cocoa and Lean Hogs) or in a deep pullback (Sugar, Gold and some forex). A bit painful when you are noob like me and need to build on your confidence, but looks like this is when the best opportunities arise. Hopefully they will not all reverse, otherwise with such a slow system as mine it will be pretty painful. LTT
Hi Handle, very nice for me to hear of your experience. I was labelling me 'long term trader', but 9/25 years is really a lot. I don't even think I have the historical data to go so much backward. However I agree that the longer trades can yield the better results. Testing on my system I always found that reversing positions too often can really cut your profits. True it's sometimes boring, but especially you have to bear the large drawdowns. What I do to diversify a bit my systems and smooth equity is to add some components that try and leverage on short term pullbacks, but always in the direction of the main trend. Options, as well as order execution (especially on rollovers), are really something I need to delve into. Are you usually selling or buying them? LTT
Hi LT Thanks for the mention. The obvious question I have is why you have no financial contracts? (Bonds, equities, STIR, vol). GAT
If you need longer duration free charts goto www.barchart.com futures they have charts, quotes and option pricing
GAT, you trade long term as well? Seems to be dying breed, although this is more of trading forum and less so of holding and flipping into next contract.
I been going long Nat Gas for awhile, November on been buying Copper, Hogs too. Been short Cocoa since 2011, dancing many option plays last couple years, when it made triple/quad top-it is a matter of time when the market drops so I can reverse and go long, be awhile till it gets below 1900. Sugar found "a" bottom in 2015 and took profit on half and hedging somewhat profits, taken few add-ons to watch them stopped out at breakeven, am working a loss right now but volume coming up so maybe it will rise. Gold not gone down enough for me to get long. When I first started after years first profitable system worked then failed, so miserable, so trading it like doing what others fear the most, but you learn to manage risk first and profits second. I am only trend trader when I am adding to a position, but again, often times most have said trend has changed. I love Long Term better than anything, have it automated. Yeah, beginning years are difficult in any timeframe.
This is the only place I've been where, with an expected average holding period of a few weeks, I'm considered 'long 'term'... GAT