SPX, 1195.18. FV, 1064.5. OFV, 1088.65. POFVF, 1223.00.
Note the addition of a new number, POFVF. POFVF stands for Predicted Optimistic Fair Value Future. It is the theory of when to take profits.
Out last two units 1195.15, +120 handles. Total on three trades +172 handles. I know that I left 70 handles on the table by not having this theory, but what can I do? I learn as I go along and I amend the model. In the future, profit taking will make more sense in the face of POFVF.
One thing that I will note here. POFVF will probably become more dynamic as I understand the theory of future influences on these FVs. Right now, it is hard wired in, but I already understand how to improve it. For now, this will have to do. Also note that I chose to override OFV in favor of POFVF. There is a very strong reason for that, and while it is not in the model in a quantitative way, it is in the spirit of the model, at least in a qualitative way.
At this point, model is 450 ish handles in the green for the year using three units, or 150 handles per unit. And that is only for the last part of the year since about August when the model really "got it." Not bad at all. If you were trading once contract = 1 unit, that would be $22,500/Year. On 10 contracts per unit, which is where a trader that wants to do this for a living needs to get to imo, that would be ~$225,000/Year. And that is without the full theory for the first part of the year, so lots of money left on table. Extrapolating to a full year, it could be double that. Adding a fourth or even a fifth unit could get to the magic $1M mark, but that is for the very well capitalized traders since risk goes way up. All computations are excluding commissions, but this system is nowhere near commission intensive. Another way to increase profits is to use this system on world markets, particularly the Hang Seng. Trading nearly 18 hour days would easily get you to the $1M mark. Most "trading" is managing positions, since this is a slow system.
Volatility dictates profits, and units should also be dynamic. As volatility decreases, your contract per units needs to go up, and as volatility goes up, you can get more bang for less contracts per unit.
Note the addition of a new number, POFVF. POFVF stands for Predicted Optimistic Fair Value Future. It is the theory of when to take profits.
Out last two units 1195.15, +120 handles. Total on three trades +172 handles. I know that I left 70 handles on the table by not having this theory, but what can I do? I learn as I go along and I amend the model. In the future, profit taking will make more sense in the face of POFVF.
One thing that I will note here. POFVF will probably become more dynamic as I understand the theory of future influences on these FVs. Right now, it is hard wired in, but I already understand how to improve it. For now, this will have to do. Also note that I chose to override OFV in favor of POFVF. There is a very strong reason for that, and while it is not in the model in a quantitative way, it is in the spirit of the model, at least in a qualitative way.
At this point, model is 450 ish handles in the green for the year using three units, or 150 handles per unit. And that is only for the last part of the year since about August when the model really "got it." Not bad at all. If you were trading once contract = 1 unit, that would be $22,500/Year. On 10 contracts per unit, which is where a trader that wants to do this for a living needs to get to imo, that would be ~$225,000/Year. And that is without the full theory for the first part of the year, so lots of money left on table. Extrapolating to a full year, it could be double that. Adding a fourth or even a fifth unit could get to the magic $1M mark, but that is for the very well capitalized traders since risk goes way up. All computations are excluding commissions, but this system is nowhere near commission intensive. Another way to increase profits is to use this system on world markets, particularly the Hang Seng. Trading nearly 18 hour days would easily get you to the $1M mark. Most "trading" is managing positions, since this is a slow system.
Volatility dictates profits, and units should also be dynamic. As volatility decreases, your contract per units needs to go up, and as volatility goes up, you can get more bang for less contracts per unit.
