Organized Systems Sharing

Did I mention that my trades often lose me money at first, and I end up having to wait days or weeks for them to go my way? :(

There's always tomorrow
 
Hi a,

Shouldn't we have expected things to go poorly? I think it is a universal constant that when you want to make a point or get something started, all the things you had counted on suddenly change.:)

Today I altered my strategy, slightly. After Missing my optimal fill with ADSK (I had placed a buy stop at 16.6 on Sunday and it somehow vanished), I noticed the early market push was not getting a follow-up. I decided to go short. DSPG was seemingly the most over-extended within my group; I got a fill @ 19.41.

I'll be putting a more detailed report in the 'Onion' journal, but basically I am neutral until the market makes its next move. Of course, both stocks could go in opposite directions and f&*( me. But, my stops are close enough that I'm not too worried if they do.
 
Just to restate, I don't claim my "Peers trading" method is worth calling an Edge or even much of a system. It's just an approach I go for.

Obviously, my pick yesterday, or my call of the direction was either Wrong or Early. I am willing to bet that picking QLCG from my group will turn out to have been a good pick, even though I got the immediate direction wrong. The fact is, it really doesn't matter that much which one you pick, they're all more or less as good, and within a week any one of them is likely to get back in the lead at some point.

So, here's my thoughts about the factors I've come on so far for creating a system or an Edge:
  • Simplicity. Don't make me think too much, or make too many trades. I'm too lazy, and also the fewer commissions required the better. A penny saved is +$.01 on your P&L.
  • Openly Visible. Paranoia and secrecy are another drain on my energy I'd rather do without. Let's make a system we can tell anyone without fear of it being spoiled.
  • Patience*
*I think patience might be one of the requirements, certainly of the way I trade, and perhaps to incorporate in any system. I haven't used automated stop-losses. I've taken bigger drawdowns than most people here would recommend. But I wait them out, and can often end up profitable, if I'm able to wait. Just don't trade Options. The Time-Decay will kill you. In fact, it may be because I started out trading options that I'm conditioned to tolerate waiting rather than taking stop-losses. Simply waiting for a stock to turn around seems so easy as long as there is no Time Decay.
 
Another element in an Edge I think would be to try to reach some understanding about the importance of Timing trades. For instance, as we saw yesterday, monday morning open seems a unique thing to study. You could probably create a system based solely on trading the monday open. Call it Surge or Purge.

The system should be deliberately calculated to have different expectations of the market at different times of the day, week, and year.

Another thing you could create a system based solely on would be Earnings Report season. The Surge or Purge system could activate on monday opens. Once a week. 52 times a year.

The Earnings Report system could activate 4 times a year. Although the seasons last 6 weeks or so, they practically run into each other. In fact, I think it's here again.
 
hii
I hope you do not mind if i try to generalise your peerstrading.

basket of n stocks within the same sector on the lowest level of SP Sector Gics (or lowest level on Bloomberg, which is even more precise).

1. select a sector and select only stocks > USD10 with avg trading volume of the last five days > 250.000.

2. build two reference baskets of a and b stocks, with a+b=n.
3. define point t-x in history, which serves as the starting point of the analysis (x=no of bars).
4. set all stocks in the two baskets at 100 at t-x.
5. calculate the current normalised average price in basket a
6. calculate the current normalised average price in basket b
7. calculate the current difference between the two baskets.
8. if this difference exceeds p % set up a trade by buying all stocks in the lower basket and sell all stocks in the higher. If this difference does not exceed p %, go back to 2.

9. exit all positions once a stop loss or a profit target is reached.

10. start with 1 in the next sector

Would that mirror your stratgey?


peace
 
I don't mind your generalizing at all. Quite appreciative of you taking the time.

I would comment about whether what you have said mirrors the Peers strategy, if only I understood what you wrote. Sorry, I obviously am completely non-technical.
 
Ok, I'm down $150 for buying QLGC yesterday. Obviously my marvelous method is pretty flawed.

Bought 1 MXIM SSF at $36.80. We'll see how it goes.

I think I can accurately sum up my current situation with the word: crap-a-doodle-doo.
 
if I try to objectify your approach I have to run through all possible baskets that I could build within the specific sector to find out which combination of stocks on both the long and the short side has diverged at the most and has consequently most potential to converge. that was it basically.

sorry for sounding technical.


peace
 
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