5-Day Positional System (F&O)
- Thread starter bigbullinside
- Start date
Bloody Massacre.
Now according to this system, this is a major bullish scenario.
Now this system generated a lot more signals, but as I had mentioned earlier, I have filtered some of them to choose the top 5 trades.
We won't be taking more than 5 trades on a particular day in the same direction. And this being a 5-day holding system, the maximum number of positions that we will have open at any given time won't exceed 25. But that is very unlikely.
Also, if the system generates another 5 long signals on Monday, we will avoid taking those long positions.
We'll see how it goes on Tuesday then.
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Bloody Massacre.
Now according to this system, this is a major bullish scenario.
Now this system generated a lot more signals, but as I had mentioned earlier, I have filtered some of them to choose the top 5 trades.
We won't be taking more than 5 trades on a particular day in the same direction. And this being a 5-day holding system, the maximum number of positions that we will have open at any given time won't exceed 25. But that is very unlikely.
Also, if the system generates another 5 long signals on Monday, we will avoid taking those long positions.
We'll see how it goes on Tuesday then.
I've worked on many contra systems (atlest 100+) and frankly none are reliable. As they say .... go with flow and you will be wrong only once.. when market takes a turn.
When you started this thread, I thought this may be interesting. And your first two trades were really impressive. I silently started visiting your thred evryday.
But now it seems that you are getting defocused or not having a system at all. Why are you making exceptions to the system... something like you will avoid long trades on Monday. This only shows that you do not have enough confidence in your own system.
Also I can understand that you do not wish to reveal your system and entry/exit rules. But I guess you should share your moneymanagement and risk management rules.
Like you have menioned that you will not carry more than 25 trades. But you have never mentioned that earlier. If you keep making rules on the fly, I'm sure that is very biased to current situation.
Please take this as my individual opinion and suits what best to your system.
That is a given. If you are searching for a system which gives you 90% strike rate with adequate profits, then you will keep on searching.
There are a few points that need to kept in mind when following any system.
First expect your system to stop working at any time in the future. Because it will. Surely if it is a good one, it will stop working only for a short while, but rest assured it will.
You need to be prepared for it. Look for any signs that point to the same. There are always signs. If we take the current example, the system has given me 10 long signals yesterday. This was on top of the 5 it gave me on thursday. So this is a clear sign that the market might turn even more negative (this being a contra system and we are long in 12 positions if you count friday's signals).
You have two choices here-
1. You keep on adding to the longs and see where it goes.
2. You be selective and patient about it.
Now if the markets were really to break down, I would be getting around 10 long signals for the next 3-4 days. Now imagine the king of losses that i would be making in all those long positions. It would take me almost all of the year to recover back all my losses and then at the end of the year I would have nothing to show for it.
So during these times what you need to do is keep your positions light and keep on monitoring the system because you never know when it would start working again.
What actually happens is we start over-trading. Here we are facing around 65000 unrealised loss. Lets say we book that loss and what we start thinking is that now when the next signal is generated, i would take twice the positions to recover all the losses that i made. Happens to all of us.
But the most important part is that you do not miss out on the time when the system is actually working. This is a mean reverting system and we very well know that market spends a lot more time consolidating then it does trending. So I am not worried that by not trading the signals that are generated right now, I will miss out on all the profits. Believe me there are lots of opportunities that the market will provide to make money everyday. Key is to focus on some of them and not get carried away with all the profits that others are making.
Hope that this was somewhat helpful.
There are a few points that need to kept in mind when following any system.
First expect your system to stop working at any time in the future. Because it will. Surely if it is a good one, it will stop working only for a short while, but rest assured it will.
You need to be prepared for it. Look for any signs that point to the same. There are always signs. If we take the current example, the system has given me 10 long signals yesterday. This was on top of the 5 it gave me on thursday. So this is a clear sign that the market might turn even more negative (this being a contra system and we are long in 12 positions if you count friday's signals).
You have two choices here-
1. You keep on adding to the longs and see where it goes.
2. You be selective and patient about it.
Now if the markets were really to break down, I would be getting around 10 long signals for the next 3-4 days. Now imagine the king of losses that i would be making in all those long positions. It would take me almost all of the year to recover back all my losses and then at the end of the year I would have nothing to show for it.
So during these times what you need to do is keep your positions light and keep on monitoring the system because you never know when it would start working again.
What actually happens is we start over-trading. Here we are facing around 65000 unrealised loss. Lets say we book that loss and what we start thinking is that now when the next signal is generated, i would take twice the positions to recover all the losses that i made. Happens to all of us.
But the most important part is that you do not miss out on the time when the system is actually working. This is a mean reverting system and we very well know that market spends a lot more time consolidating then it does trending. So I am not worried that by not trading the signals that are generated right now, I will miss out on all the profits. Believe me there are lots of opportunities that the market will provide to make money everyday. Key is to focus on some of them and not get carried away with all the profits that others are making.
Hope that this was somewhat helpful.
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All that i have mentioned here is a part of the system and yes there is a system.
And i am not making all the rules as and when i see fit. I have them written down. And the part where i avoid some trades was also thoroughly tested by me.
I would like to explain again why i avoid these trades.
See, first of all as you trade contra systems, you very well know that when a trend is about to begin and lets say that we are trading only f&o stocks, you will get short signals when the trend is changing upwards in almost all those stocks within a short period of time. Now I wish to avoid those periods by simply keeping my positions light when i get more and more signals in the same direction.
25 contracts in all. And they will be a mix of both long and short positions.
If the system generates more than 10 signals in the same direction in a row, I start being cautious. And if the same persists in the coming days, i start choosing, with a cap of 15 continuous trades in the same direction or completely avoid trading if i get more than 10 signals for two consecutive days.
I saw what happened in Jan 2012 with this system and that is what prompted me to add these additional filtering rules. All the contra systems are mean reverting so there will be plenty of opportunities to make profits.
And any criticism is more than welcomed.
And I will be sharing the system here, as I do need guidance from the exoerienced traders on this forum.
But I just wanted to provide a live monitoring of the system and not a back-tested result as you can see it is not a mechanical system and involves a lot of personal discretion.
Plz do keep on following this thread and adding your opinions on the trades that this system generates.
And i am not making all the rules as and when i see fit. I have them written down. And the part where i avoid some trades was also thoroughly tested by me.
I would like to explain again why i avoid these trades.
See, first of all as you trade contra systems, you very well know that when a trend is about to begin and lets say that we are trading only f&o stocks, you will get short signals when the trend is changing upwards in almost all those stocks within a short period of time. Now I wish to avoid those periods by simply keeping my positions light when i get more and more signals in the same direction.
25 contracts in all. And they will be a mix of both long and short positions.
If the system generates more than 10 signals in the same direction in a row, I start being cautious. And if the same persists in the coming days, i start choosing, with a cap of 15 continuous trades in the same direction or completely avoid trading if i get more than 10 signals for two consecutive days.
I saw what happened in Jan 2012 with this system and that is what prompted me to add these additional filtering rules. All the contra systems are mean reverting so there will be plenty of opportunities to make profits.
And any criticism is more than welcomed.
And I will be sharing the system here, as I do need guidance from the exoerienced traders on this forum.
But I just wanted to provide a live monitoring of the system and not a back-tested result as you can see it is not a mechanical system and involves a lot of personal discretion.
Plz do keep on following this thread and adding your opinions on the trades that this system generates.
Dude, as i said earlier i am not trading this system and i am continuously asking others to do the same and just monitor it for a while.
As for the capital requirement, this system trades the entire f&o space so can't say as to how much capital would be required. Because i dont know how many signals would be generated in the next 5 days.
Although we do have a cap of 25 positions at a given time.
M2M margin would be additional.
As for the capital requirement, this system trades the entire f&o space so can't say as to how much capital would be required. Because i dont know how many signals would be generated in the next 5 days.
Although we do have a cap of 25 positions at a given time.
M2M margin would be additional.
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