2023 New Years Resolution. I

    Posted by DigiNomad on 8th of Dec 2022 at 01:56 pm

    2023 New Years Resolution. I know I'm jumping the gun, but it's going to take some planning. I'm going to take every trade the systems offer and follow them mechanically (no second guessing based on my feelings).

    The complicated part is how to size when there are so many systems in play and you never know if another will trigger on top of the ones in play. I typically allocate with the "rebalance portfolio" tool in IBKR. I increased size to 10% allocation (from .5%) based on yesterdays trigger. I kept it small because a second entry would result in a 30% total increase and a third entry would balloon to 60% increased exposure (ish). The 3rd entry is extreme, but you have to plan for it. Difficult if you have many systems in play at once! I'm determined to find a method, but would love to hear ideas / approaches. 

    I have posted before that

    Posted by mundy on 8th of Dec 2022 at 04:21 pm

    I have posted before that I use a spreadsheet for the systems and stick to that. It removes the ad hoc approach to system trades. It obviously also depends on the size of your trading account.

    Following the Systems - I

    Posted by elementsix on 8th of Dec 2022 at 02:26 pm

    Following the Systems - I made that decision this year (2022) and did my best to take as many trades as I could. In all, I only caught about 30 trades for various reasons (vacation, travel, being too busy) but I was VERY happy with the overall results of those trades.

    I did second guess a few of the trades mid-stream, usually erring on the side of caution (profit is profit). My results on those were basically net neutral vs just following the system to closure, and certainly no huge difference by using my brain. 

    Lesson: Stick with the Systems. They work .


    2 to 4 systems at

    Posted by bk1976 on 8th of Dec 2022 at 02:09 pm

    2 to 4 systems at play max

    Matt has said that normally 2 to 3 maybe 4 systems are in a trade at one time.  Yes to taking every trade and I finally have started to do that and have been rewarded. Thanks Matt!  There use to be a tool to explore differeent position sizes.  What I found to be the best for me was always take the 1st entry and the 2nd and 3rd I used the 2X and 3X per the system but I used 150% capital of the 1st entry.  I tried no first entry and varied capital for the 2nd and 3rd and this worked best.

    "Matt has said that normally

    Posted by matt on 8th of Dec 2022 at 02:33 pm

    "Matt has said that normally 2 to 3 maybe 4 systems are in a trade at one time"

    no that is not the norm. The norm is 1 system on SPY and ES. 3 and 4 systems being long is during times when the market is getting very oversold stretched and multiple systems start to take trades - but that is not the norm

    as an example let's say that one wanted to set the hard amount of entries to 12. in 80/90% of time you would only be using a 2 or 3 entries of the 12, most of the time the majority if the capital you set aside for the trades would not be used

    Love the example here: "let's

    Posted by DigiNomad on 8th of Dec 2022 at 05:38 pm

    Love the example here: "let's say that one wanted to set the hard amount of entries to 12. in 80/90% of time you would only be using a 2 or 3 entries of the 12, most of the time the majority if the capital you set aside for the trades would not be used"
    With the addition of some probabilities it's starting to get to a place where a system can be developed (a system for the systems).  Maybe I / we could compile the data on systems over the last year to give more clarity on various statistics for trades in play during the period (average, mean, etc)?

    Maybe I'm looking at it wrong. Since these are essentially swing trades, maybe it would be easier to set profit targets as a percentage of portfolio instead of trying to work with percentage allocations on each trade. *I work with a lot of portfolios so I kinda have to overthink it like this. 

    sorry, thanks for the correction

    Posted by bk1976 on 8th of Dec 2022 at 02:36 pm

    sorry, thanks for the correction

    150% on 2nd and 3rd?

    Posted by mastermind on 8th of Dec 2022 at 02:11 pm

    150% on 2nd and 3rd?

    150% of the 1st entry

    Posted by bk1976 on 8th of Dec 2022 at 02:13 pm

    150% of the 1st entry capital

    If 1st entry 10K then 2nd and 3rd 15K each


    It seems reasonable,  but you

    Posted by mastermind on 8th of Dec 2022 at 01:58 pm

    It seems reasonable,  but you could go 2x and just plan on being on margin if there is a 3rd entry.

    Agree. But what if there

    Posted by DigiNomad on 8th of Dec 2022 at 02:00 pm

    Agree. But what if there are 4 systems in play and two of them are on 3rd entries...or just one of them?

    Based on what I've seen over the years with the systems, and the recent increases in systems, it seems like I'll have to keep initial entries around 2% or so of total portfolio...if I want to allow myself the flexibility to take 100% of trades. 

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