Welcome back Meta-Traders.It was a wild week in world markets. US equities gapped back and forth, but closed positive on the week despite a 3.5% plunge on Wednesday.
Events in Europe ruled the day with a power shakeup in Italy causing a spike in Italian Interest rates. Political theatre continued in Greece and was described in an interview with Niall Ferguson on Bloomberg radio as "more farce than tragedy."
Equities were positive and I didn't do much. I've had my eye on Amazon since it plunged back to $200 after earnings. Since then its been climbing back, coming ever closer to closing the gap at $225 but still well off the all-time high of $246. It traded strong on Monday and Tuesday and finding support at about $215. Wednesday's opening gap down brought it under $215 and I went long 100 shares in each account just south of $215.
This turned out to be a mistake since AMZN moved lower on the day. I learned something here which is if you are going to trade against the general direction of the market, don't do so first thing in the morning. Wait for the day to play out since, if the direction of the day continues, you will like get a better price later in the day. Anyway, I stuck with it and it closed the week above $217. I'm going to let it go a few points higher, then sell to open the Dec 220 calls at $9.60 or better.
Also on the plus side, we had a nice recovery in the shares of pharmacy benefit manager SXCI. We also had a nice bull-elephant candle with a breakout to a new all-time high in health care cost containment stock HMSY and I'm loaded long in that stock.
Forex Robots were positive with gains in all accounts except for Atinalla #4 and FX-Regression. One interesting observation is that Atinalla #1 had winning trades, but the lot sizes were small, just 0.01 when earlier in the year it was trading 0.02 and even 0.05. I think this is due to the lot sizing algorithm and the relatively high level of the ATR.
It also raises the issue of account capitalization, and that at certain high levels of ATR, the account can appear to be under capitalized and it holds back the performance of the system. At certain dollar amounts (say less than $1000) it makes more sense to trade a 'penny' account. Well it turns out as the ATR increases, the amount of $ needed to exceed 0.01 lots increases as well. Help is on the way, however, as plan to add funds to all accounts shortly as soon as FXDD finds the 5% deposit bonus they promised me.
Atipaq Full Portfolio continues to chug along moving its way upward. Atipaq is probably my favorite system overall because of its simplicity and universality - it works on so may different currency pairs. Megadroid also took a pair of winners.
FX-Regression continues to disappoint. This system suffers from a number of problems and I'm getting close to throwing in the towel on live trading. This is worthy of an entire post - to analyze the failure and try to learn from it.
My AT#4 account had a bad week as well. First, it had a string of losing trades in both God's Gift ATR for both EUR and GBP pushing it deeper into the hole. Secondly, it stopped reporting to MyFxbook on Tuesday 11/8 and my efforts to restart it thus far have failed. I'm pretty close to pulling the plug on this portfolio, and re-positioning it for 2012 with more funds and a new system, probably of the Coatl portfolios. Failure is part of the business and I don't want to let these systems do any further damage on what has been a positive year overall.
That's all I have for your now. Enjoy your weekend and go do something you enjoy, preferably outdoors.
Hi Chris,
ReplyDeleteThank you for another great update :o) I just want to take a minute to give some advice about drawdowns and statistically expected outcomes. If you always stop trading accounts whenever they reach a point where they start to "hurt" it will be very hard to be profitable in the long term as all systems and portfolios will go through long and deep cycles of draw down. My humble advice is always to focus on statistical worst case scenarios - as determined by MC simulations - and let accounts run while they are performing within what is expected.
In my mind you cannot just start removing systems when they reach drawdown levels you don't like, all of them will at some point, that is a certainty! If you are having trouble with the drawdown levels reached by some of your Atinalla portfolios - which are well within what the simulations tell you will happen - then the best idea is to reduce risk.(remember previously when you removed GG systems in a drawdown just before a profitable period started).
Of course, I don't want to sound like I am trying to lecture you! Just some simple advice :o) Take care and again keep up the great work,
Best Regards,
Daniel
Daniel-
ReplyDeleteGenerally, I agree with that you are saying and I don't mind the lecture. Sometimes we all need a good kick the pants, and your advice overall has been excellent.
In this case, however, its clear that there is something wrong with my AT4 account - apart from the USD / CHF Atipaq instance. I'm pretty sure i'm under capitalized - there's just not enough money to trade it properly.
Also, there's something about the broker - system combination that's just not working as expected. I'm having a similar experience with my AT3 account. I've checked and double-checked the settings and I'm still getting lousy results.
In summary, the account is not acting right - compared to the identical systems traded with other brokers on Asirikuy. I see that with stocks sometime also, when they aren't acting right in the context of the rest of the market, its a warning sign and I don't need to wait around for the worst case scenario to develop.
Let's see how it works out. Thanks for reading and commenting,
Chris
Hi Chris,
ReplyDeleteOh Ok, I didn't realize this was the case :o) Obviously it is important to never trade an under-capitalized account in the first place and it is also important to consider issues related to broker dependency. I would then advice you to open up a demo with the beta versions available in the forum using the new indicator library so that you can see if this eliminates some of your problems related to broker dependency. As always let me know if you need anything and I'll be glad to help you out :o)
Best Regards,
Daniel
Hi Daniel-
ReplyDeleteThanks for the comment and congratulations on release of the v.F3-70 version of your systems today.
I'm going to run the new version on a demo account running the Atinalla #3 portfolio. As you pointed out in an earlier comment, my Atinalla #3 is badly under performing some other instances on Asirikuy. That will allow me to directly compare the portfolios across instances and code versions while leaving the broker unchanged. The results should be interesting.
Take care bud,
Chris
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