I'm sure there were a few people rolling their eyes and having a good laugh at my expense with that title, but I couldn't resist!
(This thread was originally named "The Holy Grail No-Stop-Loss System" but I guess the Admins didn't find that as funny as I did)
I've been trying to find a profitable way of trading that truly fit my style. Dare I say it, but after quite a lot of trial and error, I feel I have have developed something that works for me. It was prompted by a few threads on here, which got me thinking, and I first did quite a bit of manual back-testing, then traded it live for a while last year, and since the start of the year have been applying it with some good results. I have a set of rules, study certain pairs on Sunday, set my trades, and check them every evening. Risk is very manageable, DD so far has been about 6.5%, and should never get to more than 10% if that. Expected profitability is about 0.5% per week on average, somewhere between 20%-30% per annum. I can live with those figures.
There are many good traders out there, and I am not one of them. I was doing OK with some divergence trading, but in the end it just didn't suit my style. I needed something that could work for me.
No more watching the charts, no more trying to pick entry and exit points, no more getting stopped out only to see the trade bounce right back, or see a trade in good profit lose it all. It is quite mathematical with just an ounce of "feeling" for the market. And the last few months has been quite relaxing trading. No explosive returns, but more winners than losers.
I can trade this way for quite a while, and I will need a while to prove its profitability.
EDIT 05NOV17 As per posts #44 & #45, annualised IRR for the last 9 months is approximately 36%pa. As such, I have increased the Take Profit targets per trade for a second time, and expected profitability per week is now 0.75% per week on average, with a revised target of 30%-40% return on equity per annum. Drawdown has averaged about 5%, with a maximum of 10.1% to date. With the revised targets, this could reach 15%-20%, possibly a little higher. Furthermore, to mitigate broker risk, while I intend to continue increasing the account size, funds with the broker will be limited to A$20,000. Once the equity in the account surpasses that amount, sporadic withdrawals will be made and kept in a standard bank account.
EDIT 23DEC17 All trades closed out, system "reset" and I will start again on 08Jan18. Annualised IRR YTD is 33.7%.
EDIT 02JUL18 All trades closed out (except Corn) and system "reset" (post #106). Take Profit target per trade increased again to 0.165% per trade, so expected profitability now at 0.825% per week (on average). Highest ever drawdown to date has been 13.2%, so I'm comfortable increasing the risk slightly. IRR on AUD account for last 12 months is 25.3%
EDIT 19JAN19 Return on the AUD account was under expectations last year, at only 8.0% gain on Equity for 2018. All open trades were closed out. Trading to commence again on 21Jan19.
EDIT 31Mar19 While account is gaining, it is performing below our target. Drawdown from HWM to date this year has been no higher than 6.4%, so I feel comfortable increasing risk slightly. Take Profit target per trade is now 0.2% of NAV.
(This thread was originally named "The Holy Grail No-Stop-Loss System" but I guess the Admins didn't find that as funny as I did)
I've been trying to find a profitable way of trading that truly fit my style. Dare I say it, but after quite a lot of trial and error, I feel I have have developed something that works for me. It was prompted by a few threads on here, which got me thinking, and I first did quite a bit of manual back-testing, then traded it live for a while last year, and since the start of the year have been applying it with some good results. I have a set of rules, study certain pairs on Sunday, set my trades, and check them every evening. Risk is very manageable, DD so far has been about 6.5%, and should never get to more than 10% if that. Expected profitability is about 0.5% per week on average, somewhere between 20%-30% per annum. I can live with those figures.
There are many good traders out there, and I am not one of them. I was doing OK with some divergence trading, but in the end it just didn't suit my style. I needed something that could work for me.
No more watching the charts, no more trying to pick entry and exit points, no more getting stopped out only to see the trade bounce right back, or see a trade in good profit lose it all. It is quite mathematical with just an ounce of "feeling" for the market. And the last few months has been quite relaxing trading. No explosive returns, but more winners than losers.
I can trade this way for quite a while, and I will need a while to prove its profitability.
EDIT 05NOV17 As per posts #44 & #45, annualised IRR for the last 9 months is approximately 36%pa. As such, I have increased the Take Profit targets per trade for a second time, and expected profitability per week is now 0.75% per week on average, with a revised target of 30%-40% return on equity per annum. Drawdown has averaged about 5%, with a maximum of 10.1% to date. With the revised targets, this could reach 15%-20%, possibly a little higher. Furthermore, to mitigate broker risk, while I intend to continue increasing the account size, funds with the broker will be limited to A$20,000. Once the equity in the account surpasses that amount, sporadic withdrawals will be made and kept in a standard bank account.
EDIT 23DEC17 All trades closed out, system "reset" and I will start again on 08Jan18. Annualised IRR YTD is 33.7%.
EDIT 02JUL18 All trades closed out (except Corn) and system "reset" (post #106). Take Profit target per trade increased again to 0.165% per trade, so expected profitability now at 0.825% per week (on average). Highest ever drawdown to date has been 13.2%, so I'm comfortable increasing the risk slightly. IRR on AUD account for last 12 months is 25.3%
EDIT 19JAN19 Return on the AUD account was under expectations last year, at only 8.0% gain on Equity for 2018. All open trades were closed out. Trading to commence again on 21Jan19.
EDIT 31Mar19 While account is gaining, it is performing below our target. Drawdown from HWM to date this year has been no higher than 6.4%, so I feel comfortable increasing risk slightly. Take Profit target per trade is now 0.2% of NAV.
Return on Equity: 2017, 32.4%; 2018; 8.0%, 2019 (30Apr), 4.5%