Daytrading - 614% return in 1 week
Discussion
Hey guys,
For some "fun" I decided to give daytrading a shot and loaded up a cmcmarket account. I know that the vast majority of people lose money on this (figures I've seen are that 80% lose and 20% win) so I just wanted to know what group I fell in. I've made about 32 trades over the last 7 working days and primarily only trade one instrument (DJI) and increased my position by 614%. I think what I'm doing is swing trading, but it's kind of a strategy that I have made by myself (ie not read it on the internet/books etc..)
So over 7 days, I have increased my position by 614%. I done the same thing 3 weeks ago increasing my position a similar amount, but withdrew the money. So in essence I have increased my position 500-600% twice over 2 seperate one week periods. I find that I am making money everyday and have an average of 3-4 trades per day. There's only been a few days where the value of the account has gone down from one day to the next.
I am well aware of the risks of this and realise that these kind of returns are unsustainable and that the market volatility has helped me a great deal, however are there any tools available to find out if this has been a lucky streak or if I'm onto something here?
ie. For this most recent 7 day period:
Increase of 614%
32 trades mixture of long and short
Almost daily day on day gains
£/point has remained the same from day 1 so I'm not upping my stake as my account grows....yet
I'm just wondering if I should bail now or continue to have "fun." All or nothing, no in between such as re-investing just a half of what I've got (even though the margin requirements that I'm trading with are now a fraction of my portfolio) (yes this is money I can afford to loose)
Opinions?
For some "fun" I decided to give daytrading a shot and loaded up a cmcmarket account. I know that the vast majority of people lose money on this (figures I've seen are that 80% lose and 20% win) so I just wanted to know what group I fell in. I've made about 32 trades over the last 7 working days and primarily only trade one instrument (DJI) and increased my position by 614%. I think what I'm doing is swing trading, but it's kind of a strategy that I have made by myself (ie not read it on the internet/books etc..)
So over 7 days, I have increased my position by 614%. I done the same thing 3 weeks ago increasing my position a similar amount, but withdrew the money. So in essence I have increased my position 500-600% twice over 2 seperate one week periods. I find that I am making money everyday and have an average of 3-4 trades per day. There's only been a few days where the value of the account has gone down from one day to the next.
I am well aware of the risks of this and realise that these kind of returns are unsustainable and that the market volatility has helped me a great deal, however are there any tools available to find out if this has been a lucky streak or if I'm onto something here?
ie. For this most recent 7 day period:
Increase of 614%
32 trades mixture of long and short
Almost daily day on day gains
£/point has remained the same from day 1 so I'm not upping my stake as my account grows....yet
I'm just wondering if I should bail now or continue to have "fun." All or nothing, no in between such as re-investing just a half of what I've got (even though the margin requirements that I'm trading with are now a fraction of my portfolio) (yes this is money I can afford to loose)
Opinions?
As stated above your sample size is too small to provide any value. It may be a lucky streak, you may just be one of the very few who master day trading. Keep going and repeating exactly what you are doing. You may find that the current conditions suit exactly what you are doing at the moment and once they break out the range then your profits stop.
Otherwise, the DJI is so deep that you can multiply your trading size by many many multiples without affecting the market so if you strategy works you could have a whole new career!!
Otherwise, the DJI is so deep that you can multiply your trading size by many many multiples without affecting the market so if you strategy works you could have a whole new career!!
Thanks guys,
That book seems intresting; I will definately get a copy and have a read. Yeah, I agree that 32 trades is probably a bit too low for it to have any statistical significance, and even having done it twice it still probably lacks statistical significance.
What I've also noticed is that trades I make off my laptop with the full charts and cmcmarket platform seem to outperform the trades I make when I'm trading from my iphone app which gives limited info/charting options (again this could just be coincidence.)
I'm just going to continue going with the same £/point stake for now and see where it takes me over the next few weeks. I just hope that whatever market conditions that are making me win just now don't change.
I've always been a skeptic of books which "show" you how to make money on the markets like "Daytrade yourself to Millions" or something along the lines of that, but what other books can people recommend on daytrading/pricing trends/technical charting etc...
Cheers
That book seems intresting; I will definately get a copy and have a read. Yeah, I agree that 32 trades is probably a bit too low for it to have any statistical significance, and even having done it twice it still probably lacks statistical significance.
What I've also noticed is that trades I make off my laptop with the full charts and cmcmarket platform seem to outperform the trades I make when I'm trading from my iphone app which gives limited info/charting options (again this could just be coincidence.)
I'm just going to continue going with the same £/point stake for now and see where it takes me over the next few weeks. I just hope that whatever market conditions that are making me win just now don't change.
I've always been a skeptic of books which "show" you how to make money on the markets like "Daytrade yourself to Millions" or something along the lines of that, but what other books can people recommend on daytrading/pricing trends/technical charting etc...
Cheers
zuby84 said:
I'm just going to continue going with the same £/point stake for now and see where it takes me over the next few weeks. I just hope that whatever market conditions that are making me win just now don't change.
Actually, you ought to hope that they do change. It sounds illogical but here's why. They will change eventually. The markets always change in terms of sentiment, volatility etc. If they don't change for a few months, then assuming you rape it, you will likely and rightly be tempted to deposit more money as you will think you really do have something having made thousands of trades and made massive profits for the size you're risking. If the markets then change, you'll be raped so hard you won't be able to sit for weeks. So hope they change regularly and soon while you're still risking what you can afford to lose.
Yeah, I know that markets always change, but if indeed this is not a "lucky streak" (which I unfortunately think it well could be) I don't even know what it is about the current market conditions that are making me money at the current point. I'm quite disciplined and always have stops in place and only have 1 trade at any one time - sometimes only being in a active trade for a few hours over a 24 hour period. I'm definately not going to be depositing any more money into the account so I'm not risking any of my "real" money - just the paper money I've made.
I seem to be getting my timing in upswings/downswings of the DJI right (this is probably luck, but I hope not). When they go my way I make 100 points or so. When they go against me; I'm stopping them at 30points, so I'm not risking a massive amount. By using my limited Excel skills, I've found that I've lost an average of 28.8points over 18 trades and gained an average of 62.76 points with 20 trades (38 trades in total). So my win/lose ratio is about level but when I'm winning, I'm winning more than my losses if that makes sense.
I seem to be getting my timing in upswings/downswings of the DJI right (this is probably luck, but I hope not). When they go my way I make 100 points or so. When they go against me; I'm stopping them at 30points, so I'm not risking a massive amount. By using my limited Excel skills, I've found that I've lost an average of 28.8points over 18 trades and gained an average of 62.76 points with 20 trades (38 trades in total). So my win/lose ratio is about level but when I'm winning, I'm winning more than my losses if that makes sense.
zuby84 said:
Yeah, I know that markets always change, but if indeed this is not a "lucky streak" (which I unfortunately think it well could be) I don't even know what it is about the current market conditions that are making me money at the current point. I'm quite disciplined and always have stops in place and only have 1 trade at any one time - sometimes only being in a active trade for a few hours over a 24 hour period. I'm definately not going to be depositing any more money into the account so I'm not risking any of my "real" money - just the paper money I've made.
I seem to be getting my timing in upswings/downswings of the DJI right (this is probably luck, but I hope not). When they go my way I make 100 points or so. When they go against me; I'm stopping them at 30points, so I'm not risking a massive amount. By using my limited Excel skills, I've found that I've lost an average of 28.8points over 18 trades and gained an average of 62.76 points with 20 trades (38 trades in total). So my win/lose ratio is about level but when I'm winning, I'm winning more than my losses if that makes sense.
What % have you been risking? Your avg winning trade is nearly 20%.I seem to be getting my timing in upswings/downswings of the DJI right (this is probably luck, but I hope not). When they go my way I make 100 points or so. When they go against me; I'm stopping them at 30points, so I'm not risking a massive amount. By using my limited Excel skills, I've found that I've lost an average of 28.8points over 18 trades and gained an average of 62.76 points with 20 trades (38 trades in total). So my win/lose ratio is about level but when I'm winning, I'm winning more than my losses if that makes sense.
Just now, I'm risking about 4-5% of my account size with every trade I make with a stoploss 30-40 points away. I have no idea if that's too much or too little... I don't want to increase my stake just now, but might do IF I double my account size from here on too which could take a while as my bet size is now relatively low compared to my overall position.
How do you calculate an "average winning trade"? What is a good figure?
Cheers
How do you calculate an "average winning trade"? What is a good figure?
Cheers
4-5% is too high imo, when you hit a drawdown period you could easily hit 40-50%.
Risk reward varies from trader to trader. Some won't go below 1:1 whilst others (scalpers) dont mind using a wide stop for a small gain. There is no hard and fast rule.
However averaging 20% per trade is quite obviously bonkers and unsustainable in the long run.
Risk reward varies from trader to trader. Some won't go below 1:1 whilst others (scalpers) dont mind using a wide stop for a small gain. There is no hard and fast rule.
However averaging 20% per trade is quite obviously bonkers and unsustainable in the long run.
Due to lots of worries in the market, there's quite a lot of volatility. I don't know whether 40 point stops are big or small as I don't trade that instrument and CBA to check right now ( 
) but if the volatility drops, you may have to adjust your stop and target to suit.
R/R is over-rated, btw, but it's great for padding out time on a course or seminar. You need to understand the market and what it's likely to give you in any particular trade. I mean if you say you won't take less than 2:1 and you use a 40 ticks stop, what if you see 67 ticks and clear resistance? Do you refuse to close and let your profits disappear until you see a 40 tick loss because you won't take less than 2:1?
) but if the volatility drops, you may have to adjust your stop and target to suit. R/R is over-rated, btw, but it's great for padding out time on a course or seminar. You need to understand the market and what it's likely to give you in any particular trade. I mean if you say you won't take less than 2:1 and you use a 40 ticks stop, what if you see 67 ticks and clear resistance? Do you refuse to close and let your profits disappear until you see a 40 tick loss because you won't take less than 2:1?
If you can work out what you are actually doing, and back test the decisions with old data to prove the decision making process, I might know a company that is interested in giving you a job... 
Also, are you actually "Day Trading?" As in actually closing out all positions at the end of the trading day, and carrying no position / risk overnight when the market is closed...
Also, are you actually "Day Trading?" As in actually closing out all positions at the end of the trading day, and carrying no position / risk overnight when the market is closed...
louiebaby said:
If you can work out what you are actually doing, and back test the decisions with old data to prove the decision making process, I might know a company that is interested in giving you a job...
I'd like to think that no company would give anyone a job based purely on backtested results. Forward testing is the only reliable method as you can't curve-fit!RemainAllHoof said:
I'd like to think that no company would give anyone a job based purely on backtested results. Forward testing is the only reliable method as you can't curve-fit!
I think they'd be interested in the back tested results.They wouldn't be the only factor in their decision making process, but it will certainly get their foot in the door. Maybe I should have been clearer.
louiebaby said:
I think they'd be interested in the back tested results.
They wouldn't be the only factor in their decision making process, but it will certainly get their foot in the door. Maybe I should have been clearer.
In the current environment back-tested models would be worth very little in comparison to pre 2007. The last few years have been so volatile for so many fundamental reasons with liquidity, banking and now sovereign crises that any model that could fit all those would be astonishing. Pre-2007 the stability for back tested models was relatively solid and so worked well.They wouldn't be the only factor in their decision making process, but it will certainly get their foot in the door. Maybe I should have been clearer.
I'll see what happens. The DJI is traded for almost 24hours a day so I do sometimes carry overnight positions with a stop in place. I decided to take a punt on Admiral yesterday with the "deadcat bounce" and done quite well, but stupidly didn't close my position when the market for that closed. Opened lower today and I'm carrying a bit of a loss. Well, I learnt a lesson there! I'm just going to stick to trading the DJI where all of my other trades have been as I can keep a closer eye on price movements rather than large swings when markets open/close.
- Fingers crossed it's not all luck!*
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