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Showing content with the highest reputation on 07/09/20 in all areas

  1. 3 points
    I personally don't use any technical analysis but I listened the other day to a professional trader that uses Fibonacci patterns and she claims that indicators are getting more important these days exactly because there are developers trying to code algorithms. Since coding needs an exact value to enter and exit a trade, an indicator gives them the exact values they are looking for. https://www.youtube.com/watch?v=J-9HtEg4lcY We can classify algorithms depending on the frequency they use to trade. The ones that I think are affecting the market are High Frequency Algorithms that execute trades under a second (100 to 200 ms). They get an edge simply because they are getting the price before anyone else and can act faster. Because of it exchanges are implementing something that I found really interesting, they are extending cables to slow down connections so those algorithms get to a level that is "fair" to everyone. The video below shows how they do it. https://www.youtube.com/watch?v=d8BcCLLX4N4&feature=emb_logo Those algorithms are quite advanced and need a level of computing power that is not accessible to retail traders so they are completely out of our reach and I think they should be ignored. I consider them like another player like whales or dark pools that I don't have access to and don't get any information of what they do. Then we enter in Medium or Low Frequency algorithms. Depending on who you talk to they are classified in a frequency between 1 minute and 1 day per trade. These are the ranges I use. Pretty easy to develop and schedule in a cloud server for a small amount per month. There are many tools available for free and even brokers like IG give you code samples to execute your system. Tools like Pro Real Time or Metra Trader have this kind of ability to execute automated trades. I don't think these algorithms are changing the market per se, they improve the way retail traders act just because they are executing orders without thinking about it, so emotions are completely removed from the equation but I don't think they are fast enough or have the right volume to change a market. You could say that developers have a small edge against purely manual traders but that would be true if the system that a developer is executing is properly designed and as well as being profitable doesn't fail and execute all trades perfectly. In the professional world I would agree that coding is making a big difference, you just have to see how trading floors are not that busy anymore but in the retail world I think we are just all on the same boat. For me personally what has done is to remove myself from the ability to trade. I am the reason why my trading failed so coding a system made the difference because I was able to get rid of myself to trade.
  2. 2 points
    No problem, I enjoy these conversations. An algorithm is by definition a routine that can be executed multiple times, that takes an input and produces an output. They are also called problem-solving routines. They can be as easy as a simple sum, i.e. taking two numbers and producing the sum as a result. And complicated enough to solve a very complex mathematical riddle. Normally they are defined in pseudo-code in the design phase so then they can be translated into any programming language. If we look at trading we need to classify what could be considered as inputs, actions and outputs. Inputs are normally values provided by your data feed: Price, volume, indicators, level 2 data, orders, news. Whatever is provided externally to you and cannot be changed. You use them as they are, they are immutable at a specific time. Actions are the ones you can produce as a trader: Buy, sell, send order, send limit order, take profit and so on. Normally they can relate to what you could do with your mouse as a person. Outputs are the reports of your actions: Green if positive, Red if negative, reports, summaries, profit charts. A simple one as an example can be: 1. Subscribe to price changes on USD/GBP 2. When price reaches level 12345 BUY : Size = 1 3. Wait in a loop for price to change : check every minute 3a. If price reaches 12380 - SELL : Size = 1 (Limit and Take Profit) 3b If price reaches 12300 - SELL : Size = 1 (Stop and Take Loss) You can see that is pretty straight forward to define. It can be as complex as you like but essentially the computer is waiting for a path to follow. The complexity level will come from how many steps would you want your system to perform. Then that pseudo-code can be written into a programming language by a developer. A useful tool to define these algos is the flow chart. It can give you a quick snapshot of what your system might want to achieve. https://en.wikipedia.org/wiki/Flowchart
  3. 2 points
    I offered myself in the forum a couple of times to people that don't know how to write code. I have worked in the past with traders that wanted to automate their system with good results. I say it again, if you want something automated we can work on it. You get the benefit of executing your system by a bot and I get to see what you are doing and the way you think. An algorithm is no more than a group of sentences that matches every single possibility into a system.
  4. 2 points
    Hi, I can empathise with you on this. My solution was to walk away from it for 6 months. come to terms with my losses and except them as it being my head space as the key issue. have a good look at my self. Chose the markets i want to trade, max five. Research, research and some more research.I don't trust these gurus who have systems they want to teach. Those that can do and those that can't teach. Chasing losses is the biggest issue to overcome, loose a hundred then up the best size to cover it, a bigger loss up the bet size goes. Repeat until funds are gone. Blame the platform, blame the markets, blame everyone except myself. Now I am profitable again. Slowly slowly catchy monkey. Avoid any FX pairs with USD, Avoid high volatility and avoid setting day, week, or month targets. All the best
  5. 2 points
    A well defined plan will get rid of all your emotions. Trading has to become a boring job to be profitable, one that you do without getting any feelings from it, very close to what a robot would feel if it would behave like a person. If you are able to take a loss and continue like nothing happened then you are handling just numbers. If the meaning of taking a loss is no longer similar to a painful feeling you have reached a milestone. Two years ago I told every single one I met that I was getting into trading, it was so exciting that I didn't understand what I was getting into. Today I don't even talk about it with anyone, my relatives think that I stopped all together. I avoid getting into any conversation about it with anyone, very much like I would do with my IT job. No one is interested in hearing about my job, so trading has to become the same, another job. When is no longer exciting, loses don't produce pain and the only way to achieve that point is by executing a system step by step. When everything is scripted you know what is going to happen, you are expecting the result way ahead it comes, so feelings are way more reduced. There are many books on the topic but one I like is this podcast: https://www.youtube.com/watch?v=B9Z9qUTTuhA There are a couple of parts, they gathered together good advise for retail traders.
  6. 1 point
    On the face of it this might seem totally CRAZY but, wait.......... What happens if it works? I've spoken at length about money management and risk in previous posts - this method will show you how important it is. Trades with charts will be produced monthly for verification and the table below updated - PLEASE NOTE, I WILL ONLY BE PAPER TRADING THIS METHOD in this thread - the process is to show you how guessing works out and I'll be updating the charts and table when time permits me to do so - I don't have the time to do this real-time THT New Moon Strategy AIM: To show you the effects of a stupidly simple trading method/strategy where we exploit the R value in our favour and employ strict money management / risk methods, by knowing well in advance the trade direction we'll be taking as well as the risk and target levels We only have to be right twice to break-even and once will result in a loss of only 6R If 6R = 60% of your account then you could be in trouble for the next year - for the purposes of this exercise we'll assume 1R = 2% of your account So we KNOW right from the off, that the most we can loose is 12R or 24% of our account in a trading year if we get every single trade wrong - this then allows you to trade the following year with 76% of our original trading capital (live another day!) Wins are obviously a bonus Trade direction is LONG only (The stock markets have a long directional bias) - I could have spiced this up a bit and used a toss of a coin 5 mins before market open but its another level of faff that I can't be bothered with documenting We'll use the SP500 Index for the exercise - DAILY Chart Time-Frame (charts will be updated) - this will be the one from my charting software not IG's - so there will be a slight variance in price if comparing with IG's charts To break even we just have to be right TWICE out of every 12 attempts - which is handy as there are 12 months in the year We know in advance trade direction we're taking, the £ risk, £ profit target and the exact day we'll be trading - the only thing we do not know is if the market is going in out expected direction too! 1R below could be x% of your account Let's trade this for 1 year and see where we end up.................. RULES: 1. Entry is LONG @ the OPEN the day of the New Moon (If this date is a weekend or Bank holiday then we'll open the trade when the market next re-opens) 2. Stop 35 points (this might have to be revised slightly during high/low volatility periods) = 1R 3. Target is 5 times risk = 175 points = 5R 4. Once the position is UP 2 x risk or 70 points - stop gets moved to break even 5. Once the position is UP 3 x risk or 105 points - the stop is moved to protect 40% of any open profits until stopped out or target hit 6. Every trade will be taken regardless of whether others are still open DATE TRADE DIRECTION ENTRY STOP RISK TARGET OUTCOME **** R value July 20th 2020 LONG 35 pts 175 pts Aug 19th 2020 LONG 35 pts 175 pts Sept 17th 2020 LONG 35 pts 175 pts Oct 16th 2020 LONG 35 pts 175 pts Nov 15th 2020 LONG 35 pts 175 pts Dec 14th 2020 LONG 35 pts 175 pts Jan 13th 2021 LONG 35 pts 175 pts Feb 11th 2021 LONG 35 pts 175 pts Mar 13th 2021 LONG 35 pts 175 pts Apr 12th 2021 LONG 35 pts 175 pts May 11th 2021 LONG 35 pts 175 pts June 10th 2021 LONG 35 pts 175 pts DISCLAIMER: As we live in a world and time where you have to warn people who hold a piece of paper and a lit match close together that it could result in creating fire which burns and hurts one - The above is an example only - It is a random method designed to show you how it performs in the financial markets, it is NOT designed for you to trade, anyone trading it must accept losses as their own responsibility and if unsure, do not commit money or trade it - as one thing is for certain, the method will have losing trades and losses of some degree - this thread and post is for Illustrative purposes only THT will not and cannot be held responsible for any losses whatsoever - trading this example is at your own risk and unless you fully understand the method and risks I would advise against committing money to it
  7. 1 point
    I can't open the charts of my South African account on any platform (normal or ProRealTime) on any device - pc or mobile, yet my offshore ProRealTime accounts work fine. When will this be resolved?
  8. 1 point
    No problem, let's try something out. Think about that we have a demo platform where you can execute anything I will code, so there won't be any harm to try it out.
  9. 1 point
    The point is to prove that you don't need a method or system to win in the markets, you don't need to be smart, clever, intelligent or have a great method - I published it as an educational tool that a few people will "get" The markets offer many more times the possible % returns that the new moon method could return so why would you trade it! Even if it won every month/trade it would not make sense trading it compared to what is on offer by the markets - which is also why I was quite happy to publish it
  10. 1 point
    Thanks - I don't trade it - the point is a semi random method with half decent money management works, people who aren't achieving near it's returns needs to be asking questions about how good their method really is because there's a lot of methods touted out there that just do not work in the real world of trading.
  11. 1 point
    No, I got that, I think - useful clarification, though, thanks. My problem would be first to be able to formulate my strategies. In other words, I think it is literally true that I didn't know what I was doing (even at the start, i.e. even before the vicious cycle, as described well by Sunny Days, set in and I was completely in a fantasy world until the brutal awakening). I believe the initial problem was the lack of the ability to narrow the focus and simplify. Whenever I tried working on a strategy, I quickly realized that it will become too complex. I didn't want to ignore anything - valuations, macroeconomic conditions, mega trends, concepts like Soros's reflexivity theory, Malkiel's critique of both technical and fundamental analysis, behavioral finance, capital market theory with its focus on information efficiency, market micro structure, or more recently the idea of "flash mobs" (from, Sears' The Indomitable Investor) etc. (I tried it with back-testing from time to time over the years, but never found anything really useful. Closest I came was selling options based on rate-of-change mean reversion, which would if the right history and parameters were chosen create an alpha of 0.4% or so in the backtest....) But I am starting to work towards some kind of "system" again - after all the valuable insights gained in this forum: I think I continue using charts to identify pullbacks and rebounds - but use also all of the other stuff mentioned above to identify if the trend is up or down, or if the market is oscillating, or if there is maybe a shorter term trend only currently dominating a longer term trend. Once that is clarified, the trading rules can be simple - as you said in another post, e.g. buy on pullbacks when the trend is up. This combined approach seems to me to solve some of the paradoxa I'm struggling with. It still doesn't look easy to me to formulate this in a way that it could be automated and back-tested, though. Wise would maybe be to run a simple benchmark strategy in parallel, e.g. as long as there's no death cross, the trend is up, etc... (and again, disciplined risk management is prerequisite, for which in my case strategies to be able to handle emotions are crucial) But in the past, unable to bring order into the chaos... I went for trust in intuition, likely also motivated by humanistic idealism... (still don't think the robots will take over). Obviously I was totally naive and unable to learn. Guess this is rather unique in its stubbornness... which likely persists to some extent, given I still do believe my initial intuition was probably right more often than not - but at least I'm by now finally convinced that my execution (or better: loss of control) was disgracefully underwhelming... sorry I think was digressing a bit - however as I'm on it already... we never visited a trading floor in school, but one of my first (more virtual) "encounters" with markets sounded like this..., with all the algo dominance nowadays maybe refreshing to read some late 19th century stuff...: ‘Mr. Hall Pycroft, I believe?’” said he. “‘Yes, sir,’ I answered, pushing a chair towards him. “‘Lately engaged at Coxon & Woodhouse’s?’ “‘Yes, sir.’ “‘And now on the staff of Mawson’s.’ “‘Quite so.’ “‘Well,’ said he, ‘the fact is that I have heard some really extraordinary stories about your financial ability. You remember Parker, who used to be Coxon’s manager? He can never say enough about it.’ “Of course I was pleased to hear this. I had always been pretty sharp in the office, but I had never dreamed that I was talked about in the City in this fashion. “‘You have a good memory?’ said he. “‘Pretty fair,’ I answered, modestly. “‘Have you kept in touch with the market while you have been out of work?’ he asked. “‘Yes. I read the stock exchange list every morning.’ “‘Now that shows real application!’ he cried. ‘That is the way to prosper! You won’t mind my testing you, will you? Let me see. How are Ayrshires?’ “‘A hundred and six and a quarter to a hundred and five and seven-eighths.’ “‘And New Zealand consolidated?’ “‘A hundred and four. “‘And British Broken Hills?’ “‘Seven to seven-and-six.’ “‘Wonderful!’ he cried, with his hands up. ‘This quite fits in with all that I had heard. My boy, my boy, you are very much too good to be a clerk at Mawson’s!’ (from "The Adventure of the Stockbroker's Clerk", a Sherlock Holmes story by Arthur Conan Doyle)
  12. 1 point
    What you can lose in a few days, will take you months or years of constant discipline and patience to make back again. Here is the curse of trading, and why most people get out and sell training courses instead 😜
  13. 1 point
    And on days like this one, you sit in front of the screen all day and - nothing happens. And this takes an enormous psychological toll. And if markets are choppy for days or weeks on end ... full blown depression, if you haven't already given up all the profits you made
  14. 1 point
    Hence I watch every trade, I trust my instincts and knowledge rather than trusting a computer code.
  15. 1 point
    I could feel your pain. i looked at my losses as IG were kindly holding on to my money for me. It was safer to leave it with them and not the banks lol. I have been fascinated with the markets since school when we went on trip to the trading floor. Life didn't allow me to peruse my passion until now. My initial losses were heartbreaking. I kept at it, not to chase my losses but to for fill my dream of being good at something I am passionate about I sit in front of my screen during every open trade I place, every trade Is a potential loss and not a gain., Forget about retiring to Barbados, concentrate on keeping the bailiffs from your door.
  16. 1 point
    Read your posts on the new moon strategy - very interesting! I get your point about risk and money management, and how powerful a simple strategy can be with discipline in both. As you pointed out, the strategy also exploits the upward bias of equities (Buffet attributes this bias to retained earnings, others would likely add ever easier monetary policy and rising government debt).
  17. 1 point
    Sorry, but there is already a strategy that involves putting money regularly into the account every month (long only): https://www.investopedia.com/terms/d/dollarcostaveraging.asp#:~:text=Dollar-cost averaging (DCA) is an investment strategy in,volatility on the overall purchase. It's not a trading strategy, and you should be aware of this fact. (DCA is a sound investment strategy, but it will only pay off over the VERY long run.) You can define your risk management however you want, but if you don't win enough trades you will eventually run out of money. You may limit your losses never so skilfully, but if you can't come up with a system that wins often enough you won't make any money. Sadly, a lot of people lack common sense.
  18. 1 point
  19. 1 point
    There is a guide at https://www.gov.uk/tax-sell-shares/work-out-your-gain
  20. 1 point
    Thank you jlz and THT, makes a lot of sense to me what you're saying, will check out the video and the new moon portfolio
  21. 1 point
    Yep trading can be really hard due to all the aspects going on Keep everything simple - A major signal that you're not ready to trade is that you chase every possible trading out there thinking its the holy grail - It doesn't help that most of the methods touted out there work fine on paper but not in the real line of fire I'm publishing on here a monthly dummy trade - THT NEW MOON Method - to prove that you can make money and sometimes beat all the pro fund managers out there by a semi-random method The method WILL beat most fund managers most years and the point of it is to show people you don't need to know anything about trading/Investing to make money apart from having a decent handle on risk, risk control and money management - I 1st learned of this years ago and I paper traded it - the eye-opener came when it beat the highly coveted trading method I'd created and invested months in tweaking and trying to perfect!
  22. 1 point
    ...for the sake of completeness: sure most of you know, but same effect can come from dummy portfolios. I have (only) one on a public platform (real prices of course, long only stocks and ETFs + options (index puts/calls)) - since inception late 2013 it's up 126%, it's also up over 5 years, 3 years, 1 year, 6 months, 3 months, 1 month and YTD. 1 year Sharpe ratio is 1.6, average annual return 12.8%, maximum drawdown 25.5%. so forget your dummy portfolio performance ! it's meaningless - and in the worst case makes you dangerously overconfident. wish I had crashed that to 0 in the first month.
  23. 1 point
    I started losing massively as well and what improved my situation was the ability to follow a system. If you don't have one that is clearly a flaw to fix. We discussed in this post our loses : https://community.ig.com/forums/topic/12368-whats-your-record-for-the-most-losing-trades-in-a-row if you want to laugh, we all have been there. What went wrong for me, I: ... didn't have a plan to exit before I entered, no risk management at all. ... executed my trades manually. ... revenge-traded chasing loses. ... used indicators. What went right for me, I: ... removed completely all indicators, I entered randomly. There is no way I can justify why I entered in a trade using indicators so I removed them, I also didn't look at charts at all. ... had a clear exit point that I never changed and executed with stoicism, specially when taking loses. This came out of a risk management plan. ... automated every single trade and set my trailing limits and stops loses in a separate database. This can be done with orders trough the web interface, it was just my preference to do it. ... never read the news, specially the ones specialized about stock markets.
  24. 1 point
    Please add the option to add a configurable moving average indicator to volume bars. Thanks
  25. 1 point
    When you add the volume indicator it opens underneath the main charting window, there is no option to add a moving average to this indicator at this time. Example - 50 Day moving average on volume.
  26. 0 points
  27. 0 points
    so yet another failled profit limit trigger. can see the short trade on gold was automatically opened just after midnight (red circle on chart) with a take profit limit which the price went through by several points past the spread about 3am and ... nothing, price went back up and has just now come back to the 1936 level. needless to say I closed it out manually. and no its not a stop loss, its a short and the dotted line is a take profit limit. there is no stop loss on the trade. ignore the prices on the left thats just where the cursor was when I took snapshot. can someone from IG look into this?