Sean's Journal

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February 2, 2023 at 2:49 am #102261

smurfki0808
Participant

December 2022, I joined the Mentor Course, and since then I’ve diligently worked my way through 13 modules. A good learning curve. I am really enjoying the structure and style of learning. Plenty more for me to wrap my head around yet.

Seeing people post their progress is incredibly inspiring, and kudos to you all. I can see a wealth of knowledge and experience among the group.

I have two active strategies and one passive, all based in the ASX. An outcome of doing the Mentor Course, is to diversify these strategies.

January was a welcome month for my account +6.3%

Growth Fund +7.7%
WTT +2.1%
MOMO +5.2%

DD on entire account -19.3%

Onwards with more learning and building.

Cheers

March 1, 2023 at 10:55 am #115411

smurfki0808
Participant

I am at the stage in the course where I am thinking about trading systems and styles in Modules 19 and 20. To consider these more closely, I reread sections of “Market Wizards”, “Unholy Grails”, and “Successful Stock Trading – A guide to profitability”. My challenge is to find and define with the types of approaches that suit me. I already knew that longer term momentum strategies were one option, primarily because of the lower work load when working fulltime. But, I can now see why shorter term strategies like swing, or reversion should have a place in my package. The opportunity is to consider a version of these shorter time frame styles suit me and what key ideas I can work on to develop.

At the end of the day, control risk, cut losses short, let profits run, and stay in the game.

Feb 2023

Growth Fund: -2.5%
WTT: +1.3%
ASX MOMO: -10.4%

Total for month: -2.8%

March 1, 2023 at 8:51 pm #115462

Nick Radge
Keymaster

Great news Sean.

Don’t forget to reach out to discuss – that’s what we’re here for.

-N

March 2, 2023 at 2:20 am #115464

smurfki0808
Participant

Absolutely Nick. As of next week, I am on leave to focus on these outcomes. I’ll schedule a time. Thanks.

March 9, 2023 at 5:28 am #115412

smurfki0808
Participant

Expectancy and position sizing – Modules 22 and 23. Mainly notes to myself, but I’ve had some good learnings from these modules.

The last day or so I have worked my way through these modules, creating the Excel examples and crunching some numbers. This is a great process to work through. I can see far more clearly how my position sizing has got me into trouble. While I have used a couple of different position sizing methods for many years, I was basically OK, because of my low frequency of trades. However, in the last 18-24 months I’ve increased the frequency of trades, and the ensuing impact of lower % of wins and upto a 2% risk per position quickly ate into capital.

For the sake of the exercise, I went through all of my trades in the WTT and calculated positions based on volatility adjusted sizing (RF 0.001). Certainly, the losses from those more volatile stocks was reduced due to smaller $ allocation. But, occasionally, for the less volatile stocks, position size would have been bigger, meaning I missed out on higher $ profits. However, the outcome would have been a smoother ride and a smaller draw down.

Food for thought.

March 12, 2023 at 10:50 pm #115413

smurfki0808
Participant

A little note to self 13 March 2023. “Don’t press the bright red flashing ‘panic’ button”. Trade the signals as they come. No expectations, equals no disappointment.

March 19, 2023 at 6:06 am #115414

smurfki0808
Participant

19 March 2023 – I have made my way through to the end of module 26, completing the coding/theory components. Certainly, I have gained a deeper insight into what is required in a robust trading system. Moving into the practical, I want to develop and test two strategies. 1) a simple momentum based strategy, operating on daily time steps, looking for holds in the weeks to months. Nothing special about the entry, a simple ROC entry, but with tight money management edge, quick to enter, and in a down turn, quick to exit. 2) a swing system, looking for a return to trend after a retracement. Looking for a simple bar pattern to trigger the entry, with tight money management edge, hopefully to result in a high risk:reward outcome.

The biggest challenge to my beliefs, however, hinge around the role of shorter term reversion and swing trading strategies, and how they might work for me. I never envisaged myself to run systems that trade this way. Why? 1) Clearly, I did not understand how these system work, and how they can work with momentum systems to help smooth the equity curve. 2) Presently, I do not have the processes in place to run such a system, and so thought they would be too high a workload to run while working full-time. 3) Presently, I am not classed as a trader by the ATO and I assume, a step towards the shorter term strategies will trigger that event. So, a little more thinking and consideration required here.

I look forward to keep progressing in my journey, and learning how to ‘think it, code it, test it’ and make robust strategies my own.

March 19, 2023 at 7:42 am #115497

TerryDunne
Participant

Hi Sean,

I won’t comment on 1, because now you know, nor 3, because while I’m an accountant by qualification, I’m not a tax accountant – I use a firm to do my taxes.

That leaves 2. I have strong thoughts on 2. I reckon once you have a MR system you’re happy with, you’ll spend (much) more time shaving/washing your hair/”using the bathroom”/queueing for coffee etc etc than you will running your daily exploration and placing your trades. It’s my personal opinion that this time thing is vastly blown out of proportion by the many people who will completely disagree with me. .

You could always set your alarm clock 10 minutes earlier?

Best wishes,.

Terry

March 19, 2023 at 9:49 am #115498

smurfki0808
Participant

Hi Terry,

Thank you for your encouragement, it is most welcome.

You make two important points that resonate with me, 1) “Once you have a MR system you’re happy with” – that is a work in progress, and 2) “it does not take much time”, when you are properly set up – my present trade execution is all manual, which is probably not ideal.

I have an appointment with our accountant to discuss that other 3).

Have a great week.

March 19, 2023 at 11:47 am #115499

BenOsborn
Participant

I agree with Terry, it does not take much time to run the day trade systems when you have everything set up. Takes me about 10 minutes now if I do it quick to load trades for multiple systems. Those using Interactive Brokers can probably do it quicker as I think I have a few more hoops to jump through with TradeStation.

It also takes a few minutes each morning to quickly check that live trading matches the backtest and investigate any differences. I used to keep a more detailed spreadsheet re any differences, and this would take longer, but once I was comfortable with everything I stopped doing that.

Not advice, but you there is a good chance that you may be considered a trader with your rotational and swing systems anyway so I wouldn’t let that influence any decision. I’m sure your accountant will let you know anyway.

March 19, 2023 at 10:26 pm #115500

smurfki0808
Participant

Thanks Ben for the encouragement.

I hear the message about getting my setup a little smoother. I just loaded 8 trades in my weekly system, and yes, it took about 10 minutes after I had done the prep over the weekend.

And, yes, discussions with accountant are scheduled.

Have a great week.

March 20, 2023 at 6:29 am #115501

TerryDunne
Participant

Hi Sean,

Are you using Interactive Brokers?

If so, those trades can be copied from Amibroker into a .csv file and loaded into IB via ‘Basket Trader’ under the ‘Trading Tools’ selection from the menu.

March 20, 2023 at 9:53 am #115502

smurfki0808
Participant

Hi Terry,

No, I am working with BellDirect, but I see that at some point that might have to change. I have to learn to crawl first before running!

Thanks for the heads up on what I should research.

March 25, 2023 at 3:51 am #115503

smurfki0808
Participant

Tough trading conditions – on the Wednesday group call, many noted that recent trading conditions were tough. Today I note that the XJO finished the week down for the 7th week in a row. The last time that I can see that happened was July 2008. Certainly tough on the momentum strategies and explains why my WTT portfolio is nearly all back in cash.

April 3, 2023 at 7:15 am #115505

smurfki0808
Participant

March update – I’ve continued to work on developing my first system, Emerging Momentum. We have a functioning system, using the WTT code as a template. Nearly at the point of starting some stress testing analysis, to see if it easily breaks.

Working towards all cash in my WTT (just 4 positions open) and ASX MOMO, all cash as of today. My WTT has one position, AVZ that is in extended suspension, as many others know.

WTT -5.1%
ASX MOMO -2.0%
Managed Growth Fund -1.6%

Total -2.4% taking total drawdown to -23.5%, and not a new low, thankfully.
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