Trading longer time frames

[Hook N. Sinker]

Quote from candeo:

I was wondering if anyone here is successfully trading longer time frames.

I trade longer term, usually holding positions for longer than a year.

I write computer programs that test various trading methods. I analyze trading system performance at various levels of risk.

I often find longer term methods show results that satisfy me. For example, longer term methods might show good growth rates with shorter and smaller losing streaks.

Here is a little example from my files. I back test Merck stock price, buying if the price increases 40 %, selling when the price decreases 20 %, and position size is 5 % of equity / (10 x average true range).

This tests 36.55 years of data.

===

Number of trades 11
Total profit $ 1023235
Profit after subtracting $ 10.00 commission, slippage per transaction: $ 1023015
Heat is 5.00 per cent of equity.
Drawdown is 0.0426 (4.26 per cent).
Cumulative Annual Growth Rate (CAGR) is 27.99 per cent.
CAGR / Drawdown is 6.57
Instantaneously Compounding Annual Growth Rate (ICAGR) is 6.62 per cent.
Annually Compounding Annual Growth Rate (ACAGR) is 6.84 per cent.
Information Ratio is 0.45
Initial capital is $ 100000
Long trades only.

===

System shows about 28 % annual growth and greatest draw down about 4 %.

Each position is held about 3 years. I have the freedom to live my life and the volatility is low enough that I can sleep at night.

 

[taowave]

Would you be kind enough to discuss how/if you implement stops??

Quote from Hook N. Sinker:

I trade longer term, usually holding positions for longer than a year.

I write computer programs that test various trading methods. I analyze trading system performance at various levels of risk.

I often find longer term methods show results that satisfy me. For example, longer term methods might show good growth rates with shorter and smaller losing streaks.

Here is a little example from my files. I back test Merck stock price, buying if the price increases 40 %, selling when the price decreases 20 %, and position size is 5 % of equity / (10 x average true range).

This tests 36.55 years of data.

===

Number of trades 11
Total profit $ 1023235
Profit after subtracting $ 10.00 commission, slippage per transaction: $ 1023015
Heat is 5.00 per cent of equity.
Drawdown is 0.0426 (4.26 per cent).
Cumulative Annual Growth Rate (CAGR) is 27.99 per cent.
CAGR / Drawdown is 6.57
Instantaneously Compounding Annual Growth Rate (ICAGR) is 6.62 per cent.
Annually Compounding Annual Growth Rate (ACAGR) is 6.84 per cent.
Information Ratio is 0.45
Initial capital is $ 100000
Long trades only.

===

System shows about 28 % annual growth and greatest draw down about 4 %.

Each position is held about 3 years. I have the freedom to live my life and the volatility is low enough that I can sleep at night.

 

[indahook]

Personally I enjoy longer time frames. It allows me to have fun with the market instead of sweating ticks. I call it trading even though the avg hold is 1335 days because I still use stops and employ targets ..wide but nonetheless. This is my Roth IRA strategy. And I wish my day to day trading came even close to the returns.....

 

[taowave]

Quote from indahook:

Personally I enjoy longer time frames. It allows me to have fun with the market instead of sweating ticks. I call it trading even though the avg hold is 1335 days because I still use stops and employ targets ..wide but nonetheless. This is my Roth IRA strategy. And I wish my day to day trading came even close to the returns.....

A fellow AIQ user..Welcome...

A 4 year holding period takes "longer time frames" to a whole new level!!!

Impressive,none the less!!!

 

[indahook]

Quote from taowave:

A fellow AIQ user..Welcome...

A 4 year holding period takes "longer time frames" to a whole new level!!!

Impressive,none the less!!!

I have been using AIQ for 4 years...love it!How about you?

It`s a long time. But this is a long game we play. The system is so freaking simple if I shared the rules you would shake your head in disbelief. But i`m not gonna....

Thank you!

 

[osho67]

I am really tired day trading futures. YM, ER2, SMI, and Z mostly. I donot know how I can trade futures on a longer time frame. Some comments,names of books or articles much appreciated. Though I am profitable (little) in day trading, but now I feel exhausted.Please give some guidance.Thanks

 

[taowave]

Quote from indahook:

I have been using AIQ for 4 years...love it!How about you?

It`s a long time. But this is a long game we play. The system is so freaking simple if I shared the rules you would shake your head in disbelief. But i`m not gonna....

Thank you!

I have been using AIQ for close to 16 years...I complain about it and wish they would update it,but it has features that nobody else does and I find them indespensable...

Ill get it out of you

 

[cashmoney69]

Quote from NZDSPeCIALISt:

The biggest mindf*** with trading long term time frames is that you want time to pass, it's as if you wish your life and your days would pass quicker. You enjoy the ride but at the end of the year you look at a daily chart and you can actually remember what you were doing with each bar that you look at. It's as if your days are encoded on some little tiny colored candlestick shape, that you revisit day after day.

Trading shorter time frames and there is the bane of repetition, every day repeatedly doing similar things and it's as if your stuck in a production line.
I like this quote from Dr. Steenbargers blog:

[/B]

Isn't that the truth!!.. I sit infront of my computer for hours, doing nothing except watch price move..candle..after candle..after candle, and it get REAL boring when things dont move. It's not all bad though.

--

Someone on this thread said something about how there's probably VERY VERY few millionaire day traders. If you look at it this way; Dan Zanger, Livermore, and fund managers are/ weren't day traders.

 

[dcunited]

For many of us that trade prop accts for a living it's not a question of style or personality, rather dealing with financial realities. 6-7 out of 10 trades per day I make money, so most days I'm profitable, but there are spells where I'm flat to down. When using prop leverage I can trade the volume needed to make a viable living off that trade ratio. I'd assume I'd have the same ratio if I held trades out longer say 3-4 months, but personally I don't have the finances to withstand a 1 year spell, nor would I be able to obtain the kind of leverage on those longer term trades to make a living off of them.

 

[ElectricSavant]

Obviously you have an edge. Would you in general consider prop trading and its extended leverage gambling? or is it all relative, as you trade in and out with precision?

I thought this might be on topic as most prop shops have traders trading intraday and long term holds (overnights) are allowed at different leverages.

Michael B.

Quote from dcunited:

For many of us that trade prop accts for a living it's not a question of style or personality, rather dealing with financial realities. 6-7 out of 10 trades per day I make money, so most days I'm profitable, but there are spells where I'm flat to down. When using prop leverage I can trade the volume needed to make a viable living off that trade ratio. I'd assume I'd have the same ratio if I held trades out longer say 3-4 months, but personally I don't have the finances to withstand a 1 year spell, nor would I be able to obtain the kind of leverage on those longer term trades to make a living off of them.