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Archive for April 2009

System Trading Do’s and Do Not’s

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Zulutrade sent a newsletter the other day.

I agree with some of the “Do’s” . I disagree with “3 hours or less per trade” and “win % over 90%” as it unnecessary narrows the choice of trading styles and ignores the concept of expectancy.

On the “Avoid” side, I would suggest that any system which is less than 3 months old is a new system. From experience, there may be systems which perform splendidly for weeks and months, then crash … however, if there is a fundamental flaw with the system, it is likely to be exposed within 3 months.

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Author shares some personal experience. Honest enough. However, I believe this is simple once you grasp the concept of system trading and apply some common sense to evaluation of the proposals.

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Written by A.S.

April 18, 2009 at 1:51 pm

Third week: $54 807

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20090418

Written by A.S.

April 18, 2009 at 1:04 pm

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Second week: $46’551.

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Written by A.S.

April 12, 2009 at 10:30 pm

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First week: $44 644

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1) The account is down $535 about 1.07% (when 10x adjusted to mini lots rather than regular size lots).

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2) Individual system provider performance over the last 7 days:

dagger: – 156 pips, – $158
Pro-B5: +237 pips, +$243
abuls: + 1784 pips, +$822

If all the signals are taken from all the system vendors, the account should be up $907, but it’s down $535.

In fact all the system vendors show negative returns in the demo account.

The obvious reason is that we’ve set trading limits, not all the trades are taken and so far more losing trades than winning trades have hit the account.

3) dagger has hit his max historic drawdown.

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I remove him fromt he system mix as a matter of rule to remove a system, if for whatever reason it hits a nex max drawdown. Beside dagger was a risky and inconsiderate. He held massive EURUSD position just before the ECB interest rate decision.

4) Pro-B5 looks like the most widely followed system vendor on zulutrade with 578 subscribers. He seems a very persistent master scalper and adds to profits in small piecies (average pips per trade is 15, 96.1% winning trades and 4.6 hours average trade time).

5) For the next week of trading I adjust max open trades for both Pro-B5 and Abuls to 5.

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Margin call meter is in the red, but in real-life mini-lot situation it would be at reasonably comfortable 38%.

Written by A.S.

April 5, 2009 at 1:31 pm

April 2, 11:45 GMT: $46k

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Test account equity 30 min before ECB rate decision.

20090402-1115gmt

Written by A.S.

April 2, 2009 at 11:18 am

Posted in Uncategorized

April 1: Just in … new design of position window on zulutrade

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Zulutrade introduced a new design for the position window. The new one looks better and is more easy to use.

Improvements from system trading intermediaries is a positive experience and something you may expect from time to time when doing system trading as illustrated here.

Written by A.S.

April 1, 2009 at 12:08 pm

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April 1: Position size adjusted

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I increase allowed total allowed max positions size from 2 to 3 positions for each provider.

This is something you can do at any time.

The adjustment will allow more positions to be traded in the account, better reflects the whole strategy potential and hopefully leads to better results.

In real-life account the the estimated margin requirement at this trading level would be at a comfortable 11% of account equity.

Written by A.S.

April 1, 2009 at 11:54 am

Posted in Uncategorized