puddles 2011 trade journal (formerly a 70k bet..)

Greetings P,

In actual operation, I find your approach to trading to be very thought provoking and interesting. However as such, I have a few questions for you. I'm not 100% familiar with the "Geez Methodology" for executing trades. And I assume he has already answered these questions somewhere on ET before. Also, I'm not trying to play word or mind games with you, with less than honorable ulterior motives. My interest is truly genuine. But my questions are;

1. Does the Geez Method for executing trades rely on the mathematics of "Statistical Expectancy" playing a purely numbers game of Risk to Reward of 1 to 2 at a Probability of Win (Pw) of >50%?

2. Are the technical entries of the method random, as they appear to be, or is there a set of proven pattern components that you are using?

3. And if they are from a proven set of patterns, how did you validate the efficacy of each pattern, and then combine them all to arrive at a singular Probability of Win(Pw) for the entire strategy/game?

4. What is the Maximum Adverse Run of consecutive negative trades that the method was built to successfully sustain. In other words, when does the method non-recoverably fall off the wagon, so to speak.

I can see how busy you are managing these trades during the day. Therefore, please feel free to PM me with your response, anytime at your convenience of course.

Thanks
 
Quote from KDASFTG:

Greetings P,

In actual operation, I find your approach to trading to be very thought provoking and interesting. However as such, I have a few questions for you. I'm not 100% familiar with the "Geez Methodology" for executing trades. And I assume he has already answered these questions somewhere on ET before. Also, I'm not trying to play word or mind games with you, with less than honorable ulterior motives. My interest is truly genuine. But my questions are;

1. Does the Geez Method for executing trades rely on the mathematics of "Statistical Expectancy" playing a purely numbers game of Risk to Reward of 1 to 2 at a Probability of Win (Pw) of >50%?

2. Are the technical entries of the method random, as they appear to be, or is there a set of proven pattern components that you are using?

3. And if they are from a proven set of patterns, how did you validate the efficacy of each pattern, and then combine them all to arrive at a singular Probability of Win(Pw) for the entire strategy/game?

4. What is the Maximum Adverse Run of consecutive negative trades that the method was built to successfully sustain. In other words, when does the method non-recoverably fall off the wagon, so to speak.

I can see how busy you are managing these trades during the day. Therefore, please feel free to PM me with your response, anytime at your convenience of course.

Thanks
More...

1. yes.. 50% and 2:1 is the goal.. slipping on both can still be EV+.. based on the nature of your questions i'm sure you're aware that slipping to a 33% winrate and maintaining 2:1 is neutral EV (not including fees) so there is a lot of room for variance if your fees are low enough.

2. The entries are far from random. Some "proven" (word used loosely in the context of this discussion, see point 3) patterns are used to decide if we enter. The actualy entry/stop/tgt are bounded by the prior 5 minute bar and the trade is sized based on max loss per trade.

3. There is no absolute proof as I have not completed automation. Without automation I could never really have a large enough sample size to create statistical significance.. That being said I don't think any non-automated trader could give you a different answer. geez has been trading this style exclusively for 10+ years. I know over the long term his winrate is around 48%.

4. We size our risk per trade based on a % of your trading capital. Trading at 1% risk means we could sustain 100 consecutive losers if you somehow maintain your buying power (and risk mgt doesn't shut you down). By the nature of our business, if you keep losing trades your BP drops so your risk is forced to shrink. If you were to use a variable % of your trading capital as a max loss size you could sustain losses until that % becomes so low that you cannot trade 100 shares effectively. That being said I have seen 25 losses in a 30 trade sample size before.. My personal risk per trade is well under 1% of trading capital.

I hope I answered your questions sufficiently, it was a nice way to keep me away from trading during lunch hours (I try not to trade 11am-2pm)
 
<img src="http://puddles.humanfund.ca/20110322/spy.png">

<img src="http://puddles.humanfund.ca/20110322/mhs.png">

<img src="http://puddles.humanfund.ca/20110322/wag.png">

<img src="http://puddles.humanfund.ca/20110322/nfx.png">

<img src="http://puddles.humanfund.ca/20110322/ccl.png">

<img src="http://puddles.humanfund.ca/20110322/amt.png">

9:33

LONG MHS 53.00
STOP 53.86
TGT 83.31

- MHS extended down on the daily, we want this long badly
- Long the break of the round #
- nicc joins in and curses us all
- out -0.16

9:40

SHORT WAG 38.94
STOP 39.23
TGT 38.36

- Gap and crap
- Short the lower higher under round #
- out b/e (that hurt)

10:35

LONG NFX 77.33
STOP 77.16
TGT 77.67

- Big push up, settles
- look for cont
- out +0.36

10:44

SHORT CCL 39.88
STOP 40.07
TGT 39.5

- CCL tanko from the open
- Tight lower high under round #
- out +0.36

15:12

LONG AMT 48.56
STOP 48.47
TGT 48.74

- AMT a beast all day
- Ranging at the highs
- Long the break
- out +0.17, +0.08

http://puddles.humanfund.ca/wp/2011/03/22/2011-03-22-trades/
 
Greetings Again P,

Thanks for the excellent response. You obviously don't need me to tell you that your technical logic is sound, and your method produces the desired results. But I have one final quick question. I have noticed that a good number of your winning trades have tended to continue moving favorably long after your target was executed and you are out of the trade. This statement then begs the question of:

Q- Why wouldn't you just place a trailing stop at or slightly (above/below) your target price after it is passed, and then allow your profit to run its course, subsequently trailing (tops/bottoms) all the way until the stop is executed? With little or no additional effort in your current trade management, would this not increase your Average Win, and thus enhance the overall Expectation Profitability?

Thanks
 
Quote from KDASFTG:

Greetings Again P,

Thanks for the excellent response. You obviously don't need me to tell you that your technical logic is sound, and your method produces the desired results. But I have one final quick question. I have noticed that a good number of your winning trades have tended to continue moving favorably long after your target was executed and you are out of the trade. This statement then begs the question of:

Q- Why wouldn't you just place a trailing stop at or slightly (above/below) your target price after it is passed, and then allow your profit to run its course, subsequently trailing (tops/bottoms) all the way until the stop is executed? With little or no additional effort in your current trade management, would this not increase your Average Win, and thus enhance the overall Expectation Profitability?

Thanks
More...

I'm excited for the response to this!
(higgles)
 
Quote from geez:

I'm excited for the response to this!
(higgles)
More...

GEEZ!!!!!!!!!!!!!

Is it really you?

*******

Puddles, nice trading :)

I especially like that AMT setup, one of my favorites. The "apparent" trend reversal sucked in shorts at the lower high, but is now retracing and has retraced more than 50% of the deep pullback. I call this setup the HOD magnet. Once it's gone this far, it's required by law to go sniff at that high :D
 
Quote from NoDoji:

GEEZ!!!!!!!!!!!!!

Is it really you?

*******

Puddles, nice trading :)

I especially like that AMT setup, one of my favorites. The "apparent" trend reversal sucked in shorts at the lower high, but is now retracing and has retraced more than 50% of the deep pullback. I call this setup the HOD magnet. Once it's gone this far, it's required by law to go sniff at that high :D
More...

NOD!!!!!
Pfff...ask puddles who loaded AMT first (hehe)
Still killin it on Cl Nod??
 
Quote from geez:

NOD!!!!!
Pfff...ask puddles who loaded AMT first (hehe)
Still killin it on Cl Nod??
More...

Hey, careful now, you're supposed to leave your ego at the door :p :p

I am forever thankful for the incredibly valuable lessons you demonstrated for me with your live calls day after day. My CL success was enhanced enormously by what I learned from you regarding trend, relative strength and weakness, positive R:R, inviolable risk management, using stop orders to let price take you into trades, and the ability of price to go where you simply don't believe it can go, yet it does, again and again :)

You are among those rare individuals who can demonstrate a trader's mindset at the hard right edge, no excuses. :cool:
 
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