Systematic Trend Trading

127 & 128 stopped EJ



129 & 130 stopped EU

Trade 131 EU long

(EU run's the same strategy with different management rules)

Trade 131 (+2R) & 132 stopped

Trade 133 EJ short 10R locked in

Trade 133 +10R Trade 134 +5R



Results:
Week 1 +4R
Week 2 -14R
Week 3 -2R
Week 4 -3R
Week 5 +3R
Week 6 +4R
Week 7 -7R
Week 8 -10R
Week 9 -4R
Week 10 -13
Week 11 +21
Week 12 +6
Week 13 +14R

How do you then trail a stop after moving it to b/e at +5R in profit?

After 5R I trail by 1R every time it makes a new low. I think the big idea is that every trade at least has an opportunity to be massive whilst ensuring you maintain a high enough average return on the majority of trades. I was a bit unlucky with the one before last trade today that could have gone to well over 20R but just got stopped out by a few pips.

When I look at trend traders who have been around the longest and shown the most consistent returns they all tend to use something very simple and mechanical. It's fairly hard to find systems that don't perform better with a trailing stop.

So for a long, you place the s/l 1R below a new pivot or swing low, and then don't move it up until another low is made? It seems as though that is significantly tighter than what you use up until +5R in profit.

Yes, I start with a wide SL and then tighten after a certain R-multiple is hit.

"I wanted to see if people with high levels of self-control made better decisions in risky conditions, like in the stock market. Usually, people with high self-control do so much better at everything than people with low self-control.
But it ends up that in unpredictable environments like the stock market, successful high self-control people — when in an environment where control is taken away from them — take longer to figure things out. They are too confident and won’t take negative feedback from the environment.
Whereas people with lower self-control and who aren’t as successful — they’re like, “Uh oh, a bad thing is happening. I guess I should actually figure that out."

Trade 135, 136, 137 stopped

Trade 138 EJ long

Trade 139, 140, 141 stopped

... a great story

If you can 100% buy into the evidence that suggests holding trades longer and allowing them to move against you is more profitable, you increase the probabilities you will make profits over the long run. Most know it but don't want to believe it, and that is an edge handed to you on a plate that is robust and unlikely to change anytime soon.

Attached Image (click to enlarge)

141 stopped

142 +5R, 143 EJ short

Results:
Week 1 +4R
Week 2 -14R
Week 3 -2R
Week 4 -3R
Week 5 +3R
Week 6 +4R
Week 7 -7R
Week 8 -10R
Week 9 -4R
Week 10 -13
Week 11 +21
Week 12 +6
Week 13 +14R
Week 14 -3R

This made for very educational and entertaining listening. The chap emphasised following trends and going for a more long term approach. I think he said he only takes 30 trades or so a year and he also said that a 15% return over a year would be considered a good return

Just wondering what your take is on this? What would be a realistic return on this type of trading? Also, do you think there is a risk of taking too many trades?

Thanks for your help 60!

Hi Alseonbang, thank's for the reply.

He trades on a very long timeframe (in terms of holding periods) and there is a lot of evidence to suggest that is a more robust way to trade, we also have to take into account he is being driven partly by giving his customers what they want - more volatility in returns will be more profitable but investors in funds tend to withdraw their money when the drawdowns get too much (even if they are in line with expected performance). His fund have clearly set out their goals are to make a lot of money over a long time horizon and to keep the downside risk small. There's no right or wrong in these decisions it is a question of goals and personal preference. I assume most people here are trading a small amount of money and want to grow it fairly quickly so may wish to take on a bit more risk. That being said the core ideas are easily scalable to fit into what you want or need.

The risk of taking too many trades will be determined by two things (assuming first you are working of some decent data) - extended periods of market behaviour not favourable to your system and risking too much on each trade - with both data can only take you so far, so collect as much data as you can and be conservative - greed and impatience can kill even a positive trend trading system.

Trade 144 +7R

Trade 145 +9R

Trade 146 +8R

Trade 147,148, 149 Stopped

http://www.bbc.com/future/story/2018...ut-uncertainty