SystemB – What it is
Leave a CommentSystemB has evolved since I went into hibernation.
System B is a short term breakout trading system based on weekly charts. I have coded the weekly search using Amibroker. The search then locates a number of candidates, which I select from based on visual clues, typically looking for some kind of recent breakout. The universe for SystemB is open to ASX and the US, however I am generally only tracking ASX… this may of course change from time to time.
I am tempted to run it against the Singapore and Nifty stocks – but I haven’t got to that yet.
This system is intended to work in all market conditions, however clearly many are found during times of market growth, and a much smaller number in sideways periods. I look for short entries, but I have a bit more coding (as of March 2012) to get to where I am happy.
The candidate lists are typically generated on the weekend, however I may not take an entry until mid week. Exits are taken based on stop loss, or loss of momentum (my formula). System exits are interpreted on fridays close, however I may not enact them until late the next week – making it a discretionary element.
Returning from a break
Well – a break from writing and posting.
I have done a lot of reading, and a bit of trading. Its been rough. Looking at others blogs, news articles, conversations and so on – I get the feeling I am not alone in that thought.
I wont bore anyone who may read this with the highlights / lowlights of the last couple of years.
I will say that the last couple of months have treated my account nicely. I am not alone I suspect – as they say “a rising tide floats all the boats”. The year before that… well I managed not to sink the boat. Risk management. Cut losing trades. Hunt for moving shares. Try things and experiment on charts. That is a reasonable summary of what I did.
Looking at the blogroll on my site, I see that a number of others have moved on – some silently, some with a farewell. I know I have spoken to some traders over a coffee who have been battered and bruised. Then there are the ones who survive in all markets. That’s where I am aiming to get to. Its good to have a goal they say 😉
Moving forward it’s not my plan to post my open positions, some may say that’s cheating. I’ll only post the ones I open, until next I have a break. As previously stated, follow for education. If I go to sleep I can’t promise I’ll post my closes!
ok – that was a porky above – I will give you some highlights. I visited other countries for work and pleasure (Vietnam, Hong Kong, parts of Oz). I worked on a significant project here in Australia with the government that may in the long term affect how we all interact with them. I have worked on contracts and technical implementation of interesting company infrastructure. I’ve had good trades and bad trades. My daughter has moved for a term of school to live in the mountains and go hiking. My son is learning about capitalism – he has a job in a fast food joint serving chicken. I have tested some systems (amibroker) and coded some systems (c++ / amibroker / metastock). I’ve moved into a house with my girlfriend, survived corporate downsizings and worked on a project that touched every state school here in Victoria. Its been fun.
So – who knows if I will have enough time to write!
today – close tol short
tol close
TOL: Closed my short position with Toll Holdings today at $8.41 giving a 5% loss.
As this was a short trade, it was done with CFDs. For me this means a tight stop which triggers off intraday trading, rather than the end of day. Ultimately it works out as a close anyway as the day close was above the stop loss.
As we approach Christmas and the holiday period I am slowly working my positions out of the market, so I wont have much exposure when I come to take a bit of a holiday.
today – close aqp, wan
AQP close
AQP: Closed my position in Aquarius Platinum today at 6.10 for an 8% loss.
Well, I certainly seem to be picking some stinkers at the moment! I just reviewed the entry I made in this blog for the opening – and it sure looked strong. I think I successfully picked the top 😉 Anyway missed the first day after I triggered the stop loss as I was busy on other things (working on a big project at the real job) so didn’t get to review all my positions the other night. This was missed, so the sooner I sit down with Amibroker and set up my favorite indicators the better – and not usign many indicators that should be fairly easy.
wan close
WAN: Closed my position in West Australian News today at 7.65 for a 2% loss.
You can see where the share bounced off my ATR based stop loss a couple of weeks ago, and looked like it might travel up the longer term trendline. It didn’t and both stops effectively went off about the same time – the break of the rising trend, and the fll through the stop loss. Anyway closed now, and I’m slowly winding back as we go into the Christmas break.
today – okn close
Oakton close
OKN: Closed my position in Oakton today at $3.40, for an overall loss of 3.89%.
This has been a predictable outcome as the share made a higher low (light blue sketch), but failed to make a higher high (purple sketch). The share then bounced off the ATR stop loss line, and ended up falling through it yesterday, also falling through the trendline at the same time.
Looking at my post when I pyramided in (here) I was clearly bullish, firing off the three white candles – but I did what I said I’d do – I stuck to the plan.
Issue with this trade – I pyramided in too early. I should have waited for the higher hig, which I did not do – I jumped the gun a bit.
Looks like Oakton is getting set up for a short. I’ll keep an eye – although we might just see some consolidation.
today – open sfh
Specialty Fashion open
SFH: Opened a position in Specialty Fashion today at $1.47. Hmmm… a share I’ve never owned before, and have in fact never heard of…
I selected this position today as it showed up as a high mover on my market heat map today. I pulled up the longer term chart and was able to draw an uptrend thats been more or less in place since February this year… which makes it one of the early ones to break out.
What against it? Well I don’t use indicators much, but I do cast an eye over them now and then. This share is showing declining momentum over the last three months – not unusual given this is happening a it in the current market. That said – I will follow my usual plan, and see what comes out the other end.
As an aside: System A had no new entries this week.
today – aqa open
Aquila Resources - open
AQA: Opened a position in Aquila Resources today at $10.40.
Since the last bounce on the trendline about a month ago the share has moved up quite smoothly. The retracement on friday when the market dipped was not as strong as some other stocks, indicating a bit of strength in this share. The risk is measured to my usual ATR linked stop loss, however the steep trendline may provide some support.
I put a bit more time into Amibroker tonight – trying to get the hang of it. I’ve got a bit of porting to do to bring my various customisations across from Metastock. I’d say this may take a bit of time, so looking to return to full strength in a month or so…
today – tol short
tol short position
TOL: Opened a short position in Toll Holdings today at 8.00. I wrote this up a tad in yesterdays post, entry based largely on the black candle formed on friday – an effect it appears of the Dubai situation.
The Dubai situation seems to have been a flash in the pan, however it does look to me like it shows the quickness to react of the markets to shock – a bit of a shock and the market drops 3%. The 3% was basically recovered today – however I haven’t looked in detail at the stocks – I can’t say whether the 3% was put back on the same stocks that lost it – and that in itself will be worth knowing.
Either way, a small position to test the market for shorts. The recent price action could almost be said to be a head n shoulders, although not as nice as you would see in a text book. Lets see how this plays out.
today – mcc – other notes
mcc close
MCC: Closed my position in Macarthur Coal today at 9.33 for a 9% loss.
Closed as the share made a lower high, and definite weakness has shown since the long term high was made when I entered the position. Looking at my entry when I opened the trade, I did note that momentum appeared to be dropping over the last few months – which seems to have held true this last week.
In general the market is struggling over the last few sessions as seems to be getting a lot of write ups around the traps. Time for me to look harder at my recent trades and trying to find some improvements.
When looking for improvement, there are heaps of resources to read, study and analyse – both in my library, the internet, the bookshop and of course examination of the charts I pay data subscribers to maintain. Reviewing past trades is a great place to start. Looking at the blog by the Trading Goddess there is a posting with ‘10,000 hours’, which describes the skills the greatest traders have – read it here. 10,000 hours is a term describing the number of hours it takes a person to learn a skill. This is a concept used by Mr Bighit at 5000 trades.
Review an earlier trade
Toll holdings revisited
TOL: recently exited, and I mentioned that I would review the trade with a view towards re-entry.
So I was looking at this recently in terms of breaking through the resistance at the tree recent tops. A few more days of data and the graph looks more like we’ve had a head and shoulders, at the top of the recent rise – and the last days trade is a break of the neck-line. Head and Shoulders or not – we have a lower low, lower high – so downtrend emerging. A look at the momentum shows that dropping also.
All in all – I closed the last entry stating that I still believed my original analysis that I entered on and was looking to go long again. Looks like the bears have this one, and shorts are the way to go.
The ASX 200
XJO - ASX200
The graph above is the ASX 200 as of friday. This does look like a change may be developing. I have followed these rising curves for a while now, however looking at the last day or so – we might have fallen out of the third rising curve… which whilst not meaning much, is a tap on the shoulder for me… lower lows, lower highs, change in character.
I note I have hit another stop over the weekend, and I am very close to a few others. With the US market being down 2% on friday, I suspect I’m about to get hammered. Shorts may be the way to go.
Know yourself
I have now done a search over my recent trades. You can tell I have been a bit lazy (in effect anyway, busy on non trading activities) as I have been trading what I can best describe as a small share universe. I am in and out of the same shares fairly constantly lately.
Possibly because of the ‘easy market’ we’ve been tracking since March or so…? Ease seems to have bred complacency in me. I’m not scanning the whole market – I’m going with what I know. Looking through a lot of charts today, I am trading sections of the market, and the upward trends and volatility are happening elsewhere.
So – know thyself – recognise the laziness coming into the trades, and plan to fix it. I can’t speak for the future – I may keep going as I am going until I get a chance to sit down and change direction, or I might just wind back the market commitment until I can get time to review the whole market and picking an area (and a direction) to chase.
Wrapping up
In summary – a rambly sort of post, covering a few areas. The rambly nature itself probably indicates my distracted nature at the moment. Sooo many distractions, Christmas shopping, major project on the go at my real job, getting used to new charting software.
Anyway – if anything here is of interest please post a comment below, or feel free to subscribe!
today – ALL
all close
ALL: Closed my position in Aristocrat Leisure today at 4.08 for an 11% loss.
Bought the share after a bounce thinking it would continue to bounce – however price fell, until today it passed the previous low, so time to bail. Lower low = down trend… always did, always will.
WTF: Had an entry trigger fire at close of market for Wotif.com and a buy order placed. The position was pulled as I had insufficient funds (due to purchase yesterday) so this trade did not eventuate. This would have pyramided me into WTF, so I might keep an eye on it and take an entry tomorrow.
Noticing today a few of my trades are not holding ground. Me thinks I need to do some self analysis on the weekend to see whats going on… Is it me or the market?
tradersams blog 