What trading strategies can I try on a basket of assets?

Discussion in 'Strategy Development' started by mizhael, Jan 20, 2010.

  1. Any thoughts about trading strategies that will potentially work?

  2. Murray Ruggiero

    Murray Ruggiero Vendor

    What kind of assets ?.
    Futures, Stocks,ETF's, Forex , what ?.
  3. trend following (breakout)
    volatility based
    mean reversion (Stat Arb)
  4. Futures...
  5. Any pointers to details?
  6. well i wouldnt limit yourself to just futures.. what is your account size? If it is large its probably best to implement something where preservation over high yeild is best. Honestly I would start with currencies if you have a small account.. there is limited tradable options with currencies .. Id go with a broker like oanda.. because they can control ur risk better... u can start with 100 bucks or so if u want... generally ill look for cost to trade.. like oanda is size based so ull be fine... trade strong markets.. and spread risk.. one way I trade is to grid trade statistical areas in waves ill only trade the best setups and once im in profit I lock the trade at breakeven and strip risk once all new highs are above that area...

    ill let that trade run as long as its profitable chasing it with stops.. and let the market take me out.. then i will look for a new setup..

    I dont increase the actual sizing in my positions by much as my account grows because fixed risk and profits are more efficient than % based so I simply hold more trades as my account grows and keep the same risk setup and grid out the odds.

    lets say in FX u can trade 4 different currencies.. that you are comfortable with.. and u now have more capital from fx than you can spread at a certain $ amount it become better to spread risk into another market like stocks

    for example cost to trade 100,000 $ in audjpy is 3 pips =30$ trade in and out. lets say u look for 40 pips thats 400 bucks and to keep leverage low 2:1 lets say youd need a 50k account and youd have made less than one percent and close to 10% of your profits went to pay the spread.

    its not efficient.. its best to spread the risk large timeframes.. and over many trades... here is a new example

    longer timeframe..

    same 50k account you buy audjpy nzdusd audcad and usdmxn
    just some randomly picked pairs. inject same 100k over 4 pairs so each trade is .50:1 and total basket runs 1000 pips which is normal trading large TF's and cost is about 40 bucks and its extremely stable. all the positions pay you to hold and youve stripped risk and moved stops to BE... your also not a pattern daytrader if you trade less.. and can use stocks so in this case at 10 a pip spread out over 4 trades average 2.5 a pair say only 1/2 run up as normal so 5 a pip 5k bucks cost of 40 bucks or cost of 1 % longer time so you can balance more trades and spread risk more evenly.

    once you have enough capital to justify the trade cost in equities without leverage playing a part you can spread risk into equities keep all risks even and fixed and at 1:2 risk reward on a fixed system you only need a success rate of 35% to breakeven and 50% on a fixed to breakeven so you have a 15% efficiency.

    hope that helps :)
  7. JeffUSA


    Scale Trading
  8. Good question to ask a computer. Humans are not any good in answering this type of question as far as the specific quantitative details involved. They can only provide qualitative answers. For example, swing trading, trend following, etc.
  9. eros453


  10. What concept are you relatively new to: Spamming? Correct spelling?
    You've got the "re-directed link" think down cold, however.

    Direct quote from the website:
    "Look - to be as blunt as possible, 'you get what you pay for.'"

    I bet ol Charlie (the name signed at the end of the website) was sniggering to himself as he wrote that line.
    #10     Feb 7, 2010