I have to say that I am thoroughly $%^#!@# bored. This market is not fit to short or go long, at least from my vantage point. So here I sit, in cash.
I do not, however, feel anymore that I have missed the party. Now it has become obvious that the beer, liquor, and wine are running low. A massive hangover is being fought off with Ibuprofen and a few loose joints, but like all hangovers, it must run its course.
One of my systems narrowly missed entering short last Friday, and it has been making me think more and more about the inherent faults of a binary entry and exit signal. Perhaps future systems will be designed without a binary entry and exit signal, but until I give up my full-time work, or hire a trader-servant, I will have to stick with my occasional entries at the market open and my even less occasional entries at the close.
I’m in full-on system development mode (especially so since trading has been light) with plenty of systems in development, several of which show great promise. One system is finished entirely and is being traded (with third-party auditing). It is my favorite system. It is currently under-performing but that has a lot to do with an awful first trade and a market environment that is dislocated from reality. I fully expect it to overtake the indices over the next few months.
Another system that I have traded sporadically for almost a year is in the final stages of development. It looks very very good. It will trade stocks and should trade often enough to keep boredom at bay. As most good systems are, it is very simple. The finished product will have a stop-loss and a position-sizing component which will accommodate a variable risk-appetite. Because the system seems appropriate for the level of traders who frequent this blog and the others here on iBC, it will likely become available for subscription. If the final version is robust as I believe it will be, this system should allow the average retail trader to make consistent profits from high-probability trades.
So while my account has stagnated while waiting to trade any sort of movement besides a 45 degree uptrend, there is great progress being made towards my goal of developing a quiver of non-corellated systems.
In terms of my vantage point, I’m seeing a market that is overbought. I am still looking for some oversold conditions to get long, for a trade, although I have a feeling that when these conditions arrive, I’m not going to want to buy. You can be assured that I will anyway.
You are becoming more f*&^%ing useless every day. Awhile back I told you there is no system that workds over time, only money management counts. If you ever expect to make a salary trading you better figure out that lesson quickly. Take a position and only three things can happen: it goes UP, it goes DOWN or it stays UNCHANGED. How you react to managing the EXIT is all that counts. Take it from a retired Wall Street Trader. After 25 years it still works and until the PhDs at Barclay’s figure it out, it ain’t going to change.
Dear tendollartommy,
Your ideas are intriguing to me, and I wish to subscribe to your newsletter.
Tommy, good to see you again, and thanks for the feedback.
Have you read all the articles I have written about money management? While not all of my MM articles are housed here, you might start at my Category labeled $$$ Mgmt & Position Sizing.
Maybe recently you’ve seen some various exits as I’ve applied them to Lazy Man’s ES System.
Sooo…it seems that I’ve demonstrated a basic (at the very least) understanding of money management and exit strategies.
As for reacting and managing exits, I may have an emotional reaction, but I system trade so that I do not have a physical reaction, i.e. not making a trade that I know should be made, due to emotions. I still make the trades with an edge, regardless of how I feel about the trade.
And really, there are many systems that do work over time. There are also many many different kinds of systems. Beyond that, there are different ways to evaluate systems. Put it all together and system trading is a viable strategy over the lifetime of most traders, as long as you have a robust quiver and the ability to calculate when to underweight or turn off systems as they underperform or breakdown.
ROFL @ Redshark.
Hilarity.
_____
Tendollartimmy takes a position and something happens alright!
http://videos.caught-on-video.com/recentvideos/51/wm/d02f7beb-61a7-403c-9606-984c0000d5d8.htm
Hey Wood,
I’m working with the thesis that the market reality – is the market reality. No matter how goofy or dislocated it might appear to be.
I think that’s why fundamental analysts end up holding positions longer to make profits because the thesis takes a while to finally be confirmed.
Of course, as ZH has been noting – the quants are blowing themselves up with similar ideologies.
Ideology = broken account.
My $.02 (CAD)
@Lazy man
LOL – sometimes it is best to just roll over and take it I suppose.