Tuesday, February 19, 2008

Daytrading Update

This is my equity curve from simulated trading of the Australian share price index futures since the beginning of the year. It's looking pretty consistent now, and I'll probably take it live after our wedding and "honeyweek" coming up soon. Of course, there is still huge room for improvement. I'm only capturing a fraction of the profits possible from trading a single contract. But at least they are profits.


enoughwealth@yahoo.com said...

Of course the big question is what effect the move from paper trading to real trading has on your behaviour.

If you find that you aren't trading as well when playing with real money, perhaps you could get Snork Maiden to place the trades for you, but she only executes a random sample of your trade pairs (start with 50:50 chance of a trade being "real" and work up). If you don't know for sure that any trade is "real" you may be able to achieve the same results as for paper trading. Then again, just a tiny chance that there's real money riding on a trade might still alter your behaviour enough to hinder your performance.

If you had a suitable brokerage platform, you might be able to automatically execute only a sample of your trades. Or perhaps build an engine that trades automatically using your rules database. You might be heading in this direction anyhow, since you seemed to hint at developing a "black box" trading system for sale a while back?

mOOm said...

I do have a blackbox system that uses daily OHLC data for swing trades of a few days, and found it hard to use it in a disciplined way without being awake 24/5. So then I switched to improving my discretionary daytrading skills as an alternative in a market that is trading during the Australian day time. I had little success with Nikkei futures but have been successful in simulated trading with the Australian futures. There aren't any rules for this sort of trading apart from having a stop present at all times. So Sork Maiden or a computer couldn't do this. This is very much watching the screen and acting in real time. I do use the current swing trade direction to give me an idea of where the better opportunities might be (long or short) but paying too much attention to that intraday is deleterious. Most trades I've done last a few minutes, up to half an hour. We'll have to see if the training I've put myself through in the last couple of months is going to help. I know I am much calmer in real trading/investing now than I was. Maybe I can reproduce the same thing in daytrades.

Madame X said...

Looks like the line is going in the right direction... congratulations on the wedding and have fun honeymooning!