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Everything posted by Bopperz

  1. There is a bit of debate about moving stops up to lock in profit (or reduce the risk of loss). Generally I am in favour though. But be careful not to increase it to much, else you will get stopped out by noise. Classic. We have all been there. Check out some of the forum posts on backtesting, this should give you an indication on the amount of volatility in your strategy. What kind of risk/reward were you running? What timescale were you looking at, and what was the ATR when you put on the trade? (You can add ATR as an indicator, and read it straight off the chart).
  2. If there is a change that invalidates the signal, its probably a good idea to close the trade. i.e. emergency rate cut, jet plane shot down, elections/polling noise...... etc etc But if you find yourself closing trades early, i.e. closing at a loss, before the trade would have gone your way. Then you need to sit back and leave that trade alone! As for setting the stop. Check out the ATR, if you are not a multiple of that, you will get stopped out by market noise. You can also monitor drawdown when you are backtesting. Closing a trade based on a technical indicator, is very valid. You can set alerts on the platform for most of them.
  3. @House-Of-Lennard Welcome, had any luck turning those demo £ into real £ outside of a bank environment? What commodities do you trade?
  4. Back on topic.... Have you completely given up on technicals? The problem with fundamentals is the very long timescales. You spot a company in trouble, how long before the trade pays out? A long time, so that's a lot of capital tied up in a trade. I have tried fundamentals, based on some guidelines from the "Naked Trader". I think in a long slow bull market, this will make you some £$£, but I remember he was bullish cineworld. Covid really killed that trade! On a side note: What return do people aim for? I am thinking a steady 25-30% a year would be great. People seem to earn a lot more, but can they do it day in, day out, without blowing up an account? J
  5. Maybe he/she is not actually a quant. A quant would probably know the answer to the questions they had asked. And don't even get started about the compliance aspects!
  6. Hi Syswing, This is good work, I have tried writing code that picks up visual patterns before and it was very hard! Once you have this bit sorted, the other parts should follow fairly easily. As you have a background in computer science, you know how to write you code in "interchangeable blocks" etc etc. So I suggest keeping it REALLY simple, then updating as you go along. Every part of the trading strategy is important, but imo you will struggle to turn a 60% loss into a winning strategy by tweaking the other parts. So make sure your core idea (entry and exit) is a winner. 1) Exit point: You will want to try a variety of exit points, and maybe a combination based on level and time. For a first attempt, set your sell point at 2x your risk. You will need to do as much work on your exits as you do on your entry. 2) This is linked to total capital usage. Go with 4-6 open trades. If you are following several markets, consider only taking the strongest signals. 3) Good rule of thumb, MAX 2% equity at risk per trade, with 6% at any one time. As trades earn money, consider moving the stop loss up to lock in the PnL, which allows you to open more trades. For a first attempt, just have three trades at 2% equity, and build it up from there.
  7. Just a side note: I hate AO. Last time I checked the fundamentals, they were a shocker. In one of the countries their cost of sales was higher than sales, so they are selling all the stock at a loss. And that's without overheads being included!
  8. Can automation help? If the trading plan is solid, and can be expressed in code. It can remove some of the mental problems.
  9. Its a bit of data that I never look at, so I cant cheat. The problem is, if you study a price chart long enough you will find something that works. To get around this problem, I test the theory on this unseen data to see if it still performs. Imagine you were using a SMA cross over strategy and trying out different averaging periods. How would you know that 12 day vs 50 day was the best setup? If you used all your data, you would never know if you had just overfitted to your dataset. Your model may just work really well on past data and not generalise to new data.
  10. Hey guys, When back testing a new "idea", what are you doing about the recent market moves since March? I backtest over multiple years of data, but use a validation/holdout dataset of the final 10% of data points to confirm the idea actually works. However, the recent market moves are starting to make up a larger and larger amount of this validation set. This means I can create a great model, that generates good PnL over several years, but I should reject it, as it performs poorly due to Covid. Any questions, let me know! J
  11. Your theory on paying/receiving premium is right. However, when you spreadbet this is not how it works. The long call option is working as expected, you paid a premium equivalent to the option price. However when you sell an option, the margin is not related to the price paid. For example, the margin to short a FTSE100 call @ 5000 is £350. The price of the call is £1115. Basically, don't confuse margin and PnL. Margin is what is required to keep the position open, to protect IG from your credit risk (i.e. you walk away without paying). The PnL on the above trade if it expires out-the-money would be +£1115. As for price changes, you want to look at the delta of the option. Look this up, make sure you understand it. There are online calculators to do the maths for you. Lastly, most options traders do not trade price, they trade volatility. To be clear, they are not explicitly taking a view on price, they are taking a view on the shape of the volatility surface.
  12. If you email them they will increase your allowance temporarily. I was using a demo account too, they might be more friendly if they can see trading/income potential. I used to hit the limit regularly, but now I keep a database of prices, and I only need to update these daily. So I am using much less data. edit: What assets are you looking at? Can you get data from another source? Regarding the IG API in general, its not the best. I really like the web interface, and I used PRT for a while and liked it. But I do have a Oanda account purely because their API is much nicer!
  13. I have a contact who can do some dev work. Depends what your after and what language?!
  14. Hi, Is there a way to determine the exact underlying that IG are using for their prices. I know that they often make an adjustment for the futures roll, which I am okey with. I am after the underlying. With Example: London Sugar No 5. Under the product details, it would be very helpful to list the exchange, the product code etc. There isn't much info on there currently. In this case I believe it is the ICE traded futures contract with code 'W'. Which ICE call 'White Sugar Futures', no mention of London or No.5 that I can see.
  15. All forums have employees, or "friendly" people who get kickbacks. Casey may or may not be one, but i'm sure there are others. It does not mean good advice is suddenly bad advice. Just take it all in and keep a sceptical mind, like with all things.
  16. Happy for lock down to be eased so they can see elderly relatives (who are most at risk of dying). Not so keen for lockdown to be eased so they can go back to work..............
  17. Latest from the yougov poll I get asked. Travel in and out of your local area Latest results... In 6 weeks - 35% Longer - 29% In 3 weeks - 20% Now - 14% Other - 2% Free movement within your local area Results so far... In 6 weeks - 34% In 3 weeks - 25% Longer - 20% Now - 19% Other - 2% Complete lifting of all restrictions Results so far... Longer - 82% In 6 weeks - 7% Now - 4% Other - 4% In 3 weeks - 3%
  18. I think the potential for massive losses outweighs the chance of higher profits. The stats show that the vast majority of people lose at this game. Add in large price swings and things get nasty. Give me a nice gentle trending market any day!
  19. Booooiiinnnnngggggggg
  20. Just participated in a YouGov poll (and it gives your the results so far). 71% of people dont want to rush the ending of the lockdown and want to be cautious. Choices were basically: A) Be cautious, b) Start ending it now slowly, c) end it now.
  21. I think this is one area, where we will have to be patient and see how the numbers play out. The number of deaths is above average for several weeks. But the real picture needs more time to develop, are those deaths displaced from later in the year? From the graph, it looks like we have circa 50k extra deaths over the last few weeks, so far this represents an 8% increase in the 600k annual death rate in the UK. And from all this. Who actually has a trade to take advantage of their view, in either direction? (Please don't suggest buying an index and waiting 2 years!)
  22. Whats everyone's view on the UK government opening up test slots today? Looks like everyone and their dog applied and filled up all the slots. Its very difficult to check if you are a key worker, and you can say someone in your house has symptoms. So basically anyone can get a test?!?! Looking forward to getting the results back as ~75% of tests come back negative already, and those people are being tested because of actual symptoms seen by a doctor. I expect this new batch will have a very low infection rate!
  23. Hi Sam, I would be interested to know how this works out. What kind of market conditions have you tested this trade with? If the market rallies do you close the position and sell more puts with a higher strike? As for the hedge, lets look at a nasty scenario: You sell an Out-The-money (OTM) put option. The day after, the market crashes and is just above your strike. You now have a decision to make: 1) The put option you sold will now be worth considerably more. You could buy back the put, realising the loss, but it does draw a line under the whole event and you live to fight another day. 2) You wait, assuming the market does not move, the option will expire worthless. But you will have a drawdown on your capital which will be (slowly) returned by the theta decay on the option. If the market moves, could go either way. 3) Delta hedge, you accept that the trade has gone badly. There will be losses, its just how big. If you nullify the delta of the position by selling the correct amount of the underlying it will reduce your PnL to moves in the underlying. Upside, if the market continues to drop the loss on the put will be partly offset by gains on the position. Downside, if the market rallies, you will lose money on the position. Again, if the market is stable, the theta will slowly come back into your account. Which ever method you use, just make sure you decide in advance!
  24. This is classic tail risk. It works really well, till it doesn't. Then you will wipe out your account. Be clear what your trading here, (not the underlying), your trading the assumptions in the options pricing model. If (and when) the trade goes against you, make sure you have an exit plan! You could either cash out at a fixed loss or try and delta hedge or something else.
  25. I appreciate this thread. But something that does worry me is that a recent poll showed ~90% of people want to keep the lockdown. Therefore I am well out of touch with the average man, as I would have followed something closer to the Sweden model and i'd have those schools open next week. But it dosent matter what I think, it matters what the majority think. And this thread is a "minority view". The debate will never be evidence or science based. Look at how many people don't want kids to go to school, despite the under 18 death rate being so low you couldn't make a 5-a-side football match.