This trade turned out to be almost perfect, buy at the low, sell at the high. But there's also a great deal of luck involved as we will see. But as we know, luck and bad-luck will even out in the long run. This trade is just simply compensation for previous bad luck. Let's see.
This month, of the three orders that were entered, only one order was actually filled. The other two had buying limits that were never hit during the trading session. The one order that was filled, turned into a losing trade, unfortunately.
When recent volatility is significantly higher or lower than overall averages, you have to adjust your entries and exits. When volatility is high, entry and stop-loss orders have to be set wider and vice versa. So in a low volatility environment, you should not expect a deep intraday pullback. It's more likely it will just float a little higher from the start of the session, thus missing your buy limit order.
- Written by Raoul Suurmeijer
- Category: Results
In 2017, a start was made with verified actual trading results. Now we continue doing so for the year 2021.
The total net profit stands at $21469,- at the start of 2021 trading exactly one ES E-mini S&P 500 futures contract. On average this equals $5367,50 net profit per year.
Before you invest in the model portfolio, make sure you understand the risks involved in trading futures.
Again after a wait of several days, the indicator came up with a strong bullish signal. At first, the market turned around when it came only at a 0,25 point close to our entry limit. But a couple of hours later it came back down again and also almost hit our stop loss in the next 30-min bar.
Interactive Brokers (IB) is a popular broker, operating in several counties around the world, usually under local national names. Their trading platform is the same everywhere, it's the Trader Workstation or TWS. For novice users, it may be somewhat intimidating at first glance, but once you get a good understanding, you'll see it has a lot of powerful features to offer.
We have learned that disciplined trading is the only way to survive in this business. The best way to adhere to your own strict trading rules is to automate things. Let your orders take care of your trading, not your brain because the human brain usually fails in (short-term) trading. In order to achieve this, we need an extensive set of order types. TWS has just that, so let's get into it.
For the month of July 2021, only one trade was made. This was a losing trade at a full stop loss. And it once again showed us that having a stop loss in place when trading is absolutely required to stay in business. You can read all about that particular trade right here.
Finally, there was a clear bullish signal, and the market had been going up very steadily as well. This should be the ideal circumstance for a trade. And so, using the pivot statistics, as usual, an entry and exit were determined.
But bad luck struck, and exactly on this day, traders started to sell. Thanks to our stop loss, the damage was limited by what was determined before we took the trade. After the stop loss was hit, the price dropped another 50 points equalling some $2500,- for one ES E-Mini. Our loss was only $706,- This is a returning theme as you can tell from other trade reports. Limiting your risk allows you to stay in the business of trading.
At this point, we're seeing the market going mostly sideways for about 8 days. While at the same time, the indicator flips to full 100% bullish mode. Looking at pivot statistics and previous lows, it seemed like a favorable trade would be to enter into a long position around 4175,00. That's quite a significant intraday pullback, but statistics tell us that's not unreasonable to expect.
And indeed, our open buy limit was hit almost perfectly with only getting 0,25 lower as you can see on the chart. But then, a few candles later, the market went even lower. But not long after that, a nice recovery set in, only to give back some of it at the end of the session.
Sometimes, when all indicators are 100% pointing in one direction, it may still be difficult to place a high probability trade. On the one hand, you want to get your order filled, on the other, you don't want to get your stop-loss to get hit and preferably a reasonable chance of reaching your target. As always, this is a game of chances, so you want to determine the probabilities for hitting those levels as well as you can. How did that work out in this trade?
This trade was a two-day trade, something we haven't seen in a while. But it's perfectly ok of course. If the indicator keeps pointing in the same direction, there's no need to close the position. Although, some scenario's come to mind where closing and reopening the position could add some extra profit.
Today was a short trade, not very common in the model portfolio. Most of the time, down days, happen during volatile times which can make it hard to place a correct order (opening en stop loss).
This time, all five neural networks had a perfect bearish outcome, and market circumstances allowed to place a trade that made sense with regard to risk-reward. When that opportunity comes up, even if it 'feels' uncomfortable, it's the right thing to do.
It's not very often that you're going to see trades of the day with gains that small. But just looking at the result doesn't tell the whole story here. This is the third trade this month, and the resemblance with the previous two trades is remarkable.
The market gods still have not given us a significant profitable trade ever since December last year(!) In February we decided to hold off, March now has only two trades. The first was a minor winner, the second a minor loser. And for me, there's a clear thing that stands out: stop loss!
Look again at the first trade this month, especially the chart that shows entry and exit. Then compare this with today's trading chart.
Finally, we had a profitable trade for the model portfolio. It's still a very minor one, but having losing trade one after another is very decremental to the faith you have as a trader in a specific trading methodology.
Picking a good entry-level and stop loss level is always difficult. But as we can see from the chart, entry was near perfect. But as the trade took place, I could see there was a lot of nervousness going on, even multiple factors compared with an average trading day. Price behavior at the entry was erratic, but then the recovery from that low seemed to set in. The fixed stop loss was pulled up in steps of 5 points very quickly, and lastly, a 4 point profit was locked in. Luckily so, because the market decided to go lower again, even well below our entry. At one point the position was up 32 points, so there was good reason to pull up that stop loss.