Swing trades

All posts tagged Swing trades

Learning the platform

While I have not solved my initial frustration with the TradeStation platform, I have learned my way around the platform well enough to begin generating Strategy Performance Reports and backtesting strategies on baskets of stocks using Portfolio Maestro.

The basis for my swing trading I learned from Ken Long of Tortoise Capital Management, initially through a workshop at the Van Tharp Institute. Bill Brower of insideedge.net programmed Ken’s systems for TradeStation and I have installed the first bundle to begin my testing. Just seeing the inputs and variables Bill Brower offers for the systems has helped me understand the platform better.

Backtesting Questions

There are several questions to answer in evaluating backtests. The first one for me is to decided what is the universe of stocks that I wish to test. Should I use the Dow 30? S&P 100? S&P 500? A set of ETFs? A personalized list of targets? The trading universe will be the first determinant in how many trade signals I have to take. More stocks will yield more signals, but will also likely yield more losing trades. How many different targets can I trade based upon my current account size?

The next important question to settle is how far back I should test. Until early 2018, we were in a long slow-grinding up market. If I only look at the last couple of years, the results will likely be biased by the market condition. What period of time do I need to test in order to make sure I have representation for different market conditions?

Design features

The bundle of Ken Long’s systems provided by Bill Bower offers a bet sizing algorithm and an exit plan as part of each strategy. While useful and necessary in order to have a complete system, I am interested in other options than what are included. This will likely mean I end up coding my own version of the systems to meet my specifications. I believe Portfolio Maestro will override the money management (bet sizing) setting from the strategy, but I’m not really happy with the options it offers either. This may be one of the more difficult items for me to sort out.

The exit strategy seems to be a little easier to work around. There is an initial stop that becomes a trailing stop a a multiple of the initial risk. By setting this multiple to a large number, I can create the space for some other exit strategy to step in and exit the trade in a way other than that specified by the original Ken Long strategy. I have already identified and coded a second exit based upon the PSAR that I will be testing.

Test results

I have already run over 100 tests with the different systems, using different groups of stocks and assorted options for the strategies. I am generally pleased with what I am seeing, but I will need to dig a little further into the results and do some other calculations within Excel with the trades before I have anything definitive. I still have a lot to learn about the platform, but each day I’m getting more comfortable with the platform and the tools I now have at my disposal to become a better trader.

Daily Reports

It’s been a few days since I have been able to post because I was traveling. I was not sure what sort of internet access I would have or how much time I would have to devote to trading, but I was hopeful that I will be able to do my basic 30 min to one hour routine. That didn’t happen, so I’m playing catch up tonight. The charts would be too numerous to post here as I’ve closed out 27 trades since my last report, so I’ll stick to the reflections on my experiences and the next steps I plan to take.

Day trades

On 20 June 2018, I was able to place day trades, building off of my experience using the spreadsheet I’ve built. Recognizing that entering orders was a difficult part of the process, I decided to prefill orders with the size and type for each of the potential trade candidates. Once the market opened, I would then only need to fill in the appropriate price. These seemed like a potentially quicker method, but I tried to be too efficient and added stop and take profit orders as well. This made for an overwhelming order screen. Because I could not adjust all three prices (entry, stop and profit) quickly, I ended up canceling all the stop and take profit orders. This cleaned up my screen, but not before I made some order entry mistakes. I sold at least one stock when I was supposed to enter long. I happened to profit on that trade, but I also had a trade run to -1.5R before I got out because I didn’t have the stop in place and wasn’t watching carefully. With 14 trades, I netted +.17R.

Day trading lessons learned

I tried to push my span of control by pre-entering orders. I got more trades, but not better returns. I either need to figure out better order entry method and/or reduce my possible target set. I also have been placing all these trades without looking at a chart. It’s possible that there are other signals I would have seen on a chart that would have cut some of my losses sooner. If I reduce the number of possible targets, I should be able to better manage the orders and watch the chart. While this will limit my data sample, it will increase my accuracy, which should lead to an increase in my bottom line. My intention for 2018 is to be more focused. Here is another example of where I need to be less scattered, even as I am focusing on one technique. Living to trade another day is better than practicing mistakes and creating bad habits. I don’t need to catch all the possible trades. I need to execute my plan and let the trades take care of themselves.

Swing Trades

Eight swing positions were opened since the last update. Four of those were closed yesterday, and four remain open. Overall 13 trades were closed for -8.27R. Only one trade closed for a loss greater than -1R, and that was just -1.04 because it opened above the stop (it was a short). Market conditions turned unfavorable for swing trading at the end of the week, and because I was not watching closely, several of these trades went all the way to full -1R losses because I never adjusted the original stop. I believe some of the losses would have been smaller if I had paid better attention to what was happening. I do not expect to initiate any swing trades for the next few days unless they are residual portions of successful day trades. I will be more ruthless in my stop management for the remaining swing trades that are open. Seven positions are open showing a combined +.36R

Long: AAPL, CME(2), GIS, MKC, TLT, X.
Short: none.

Spreadsheet Day 2

With what I learned yesterday, I was a little more prepared today to enter orders from the spreadsheet. I had already pared the list of targets down and chose to enter orders manually as quickly as I could for the targets that fired first. I ended up placing trades in XLV, HD, AXP, XLU, and JNJ. It was hectic transferring the entry orders and position sizes manually from the spreadsheet because the market was moving quickly. Here are the charts of the trades:

While I feel there is definitely room for improvement in what I managed to do today, the results (+2.25R) for the 6 trades were certainly acceptable. I may be stretching my span of control by following so many possible targets, but as long as I am paper trading this idea, I will continue to enter as many as I can manage so that I can look for other qualities to screen on the spreadsheets to help give me another edge.

Swing Trades

No swing trades were opened today. The double position in CAT was stopped out as well as OKTA. Net for the three positions was -1.51R. when combined with the day trades above, that gives me +.75R for the day.

Short: XES.

Excel Spreadsheets

For many years, I have used Excel and XLQ to run daily screens for trade candidates. At one point, I was working with the Excel API from IB to submit and monitor trades directly from Excel. This probably still the way that comes closest to using what I know to automate my trades, however the spreadsheet connection was not stable, so I’m back to looking at other options.

Because spreadsheets are how I continue to review the market and search for trades, I updated a spreadsheet to assist me with my day trades. Today I made an attempt to use the spreadsheet to manually enter trades. By doing so, I made a few discoveries about the sheet and my trading style. I quickly used a filter to limit what was showing on the spreadsheet to only those targets with a history of high reward to risk ratios. The part I missed was the need to monitor the distance to my stop loss. There were a few candidates on the list that had very small movements as units of risk. For example, GDX used a stop loss of only 8 cents. I realized this after I placed my order to buy. That makes each penny change in price .125R. I chose to then limit my targets to those with a stop of 20 cents or more.

By the end of the day, it always shows me a nice potential profit, so I’ll continue to work with it until I can get the execution in place.

Swing Trades

Five trades were opened today while the double position in INTC was stopped out.

Short: XES.


Today was a wonderful example of why I need to automate my trades. While I thought I would be able to monitor the market for the afternoon (not always my favorite thing to do on a Friday), I had a surprise at my job and ended up working much longer than expected. If I can get my cash to work for me, then how long I stay at work would be less important.

As I explore the automation of my trades, I recognize how I have built systems in other areas of my life. Repeated processes are streamlined. Over twenty years ago, someone described my driving as “efficient,” and it’s a word that I’ve found applies in many areas of my life. If there is something I can do to keep from doing the same boring process over and over again, then I take steps to minimize the time I spend on the task. It should be no surprise then that I’m looking to do the same thing for trading. It’s a part of my personality that I need to respect.

Trading requires not just knowledge about the markets, brokers, and platforms, but self-knowledge. This is why buying systems from others does not usually work. Trading systems need to fit the personality of the trader, or there will be constant battles going on between the trader and the system. By recognizing that I am inclined to automate areas of my life, my drive to automate my trades is recognized and becomes easier to implement. Now I just need to settle upon the best software available to me now.

Swing Trades

Six new trades were opened today with the double position in WYNN getting stopped out (-.97R total). I had set a stop and reverse as an intraday play yesterday, but did not keep the stop and reverse overnight.

Currently holding 13 open positions showing a total of +2.44R

Short: XES.

*Update from 6/18, I overlooked that AEM also closed out for +.31R.


After the bumps I encountered with TradeStation, I was delighted to consult with some of my colleagues today about other trading platforms and options for automation. The one that caught my eye today was MultiCharts. One of my frustrations with TradeStation was being able to find information and details on their website about how the platform works. Their “University” only references a small number of videos and didn’t seem to offer any simple text support. MultiCharts gained some immediate brownie points with me because they have a wiki with detailed instructions. They may or may not be complete – I haven’t explored them too much yet – but it’s certainly more than I spotted with TradeStation. Yes, TradeStation offers a help guide from within the platform, but I find it odd that that information is not on their website…

Another item I like about MultiCharts is that it will work with my current IB accounts. I still have some questions about how that will work since I have three accounts linked together at IB. I have downloaded the platform and expect to start my free 30-day trial soon, perhaps tomorrow. When I started using TC2000 earlier this year, I found it very intuitive. I hope MultiCharts will be as intuitive as the website makes it appear.

NinjaTrader was also mentioned as an option. I used the platform briefly several years ago, especially for its replay function. A quick scan through the NinjaTrader website shows it may still be useful for me, but the website seems geared to selling the platform first and foremost. I did discover a seemingly comprehensive help guide, so they might still be a possible contender.

Choosing a platform is much like choosing a broker. There are a multitude of brokers because there are a multitude of individual needs and expectations. As I explore these options over the next few days, I hope to become more precise about what I need from a platform and what are simply my preferences or habits in trading. Learning requires an encounter with the unknown. Only when we step outside our comfort zone do we truly realize what the boundaries look like. Looking at my trading through the lens of these three different platforms will help clarify my vision of trading and should enable me to choose one as the next step forward on my path to trading automation.

Swing Trades

One new position was added today (on both platforms) – a second position in WYNN. Currently holding 9 positions showing a total of +1.92R

Long: AEM, CVX, INTC(2), OKTA, TLT, WYNN(2).
Short: XES.


Last night I experienced some frustration getting started on TradeStation. I have become accustomed to entering all my orders in the evening for any trades I frame for the next day. Unless there is some box for me to check or uncheck somewhere within the TradeStation platform, that does not seem to be an option. I was able to enter the orders this morning before the market opened, but the frustration definitely moved me out of the zero-state last night. There are some other order entry options available that will expedite placing orders and some of the day-trading systems, so I’m not giving up on TradeStation yet. IB had a learning curve until I became familiar with the platform. I should be prepared for the same set of obstacles with TradeStation. The journey is not about the speed of implementation. It’s about the process and continuing to move forward.

Swing Trades

Two new positions were added today (on both platforms). Currently holding 8 positions showing a total of +.7R

Short: XES.


My trading win for today was downloading and getting the TradeStation platform running. I was able to attend the Tuesday webinar introduction to the platform. While I’m not sure it was the most useful webinar I have attended, I learned enough to start playing around on the platform on my own. I have downloaded a couple of their EasyLanguage books and will start figuring out how to code and backtest ideas on the platform. The platform is comprehensive, so this slow start is not just a reference to rebuilding a portfolio from yesterday, but also the amount of time it will take for me to master all that I need to learn about the TradeStation platform. All trades framed for the next month will be entered on both my current IB platform and the TradeStation one.

Swing Trades

For the swing trades today, I added a second position in INTC. Currently holding 6 positions showing a total of +1.0R

Short: none.


(to be completed in the morning)

Swing Trades

The rotation from Friday is complete in that the remaining two positions that did not close were closed today. Net for the two trades closed was +.68R.

Seven trades were framed today with entries on five receiving fills. Current holdings show +.6R and are as follows:
Short: none.


I’m deciding to make a little change in how I write these daily trade reports. The nuts and bolts of what happened will still be reported, but I’m moving those down to the bottom of the post. The journey to becoming a better trade is not a reflection of the trades I take, but what I notice and how I think about the trades I do (or do not) take. If the reflections are the important part, then they should come first.

As you’ll see below, perhaps because I framed no trades this week, the portfolio is down to only two open positions, and one of those barely survived its stop loss on Friday. For that reason, I feel like I will be starting fresh on Monday morning.

The systems I presently trade buy pullbacks in markets trending upwards. Looking at the daily or weekly charts for my favorite targets, very few show strong upward trends at the moment. For the past several weeks, perhaps even 2-3 months, they have been trading in the same range. If there isn’t a 2:1 reward:risk ration available for the trade, I’ll pass on it. Since I started using 2ATR as my position size, that means I need 4ATR of possible movement to the upside before I will enter the trade. In this quieter more sideways movement of the market, that is leaving me with fewer trades to take. My reflections for this weekend leave me wondering if I should go back to a smaller risk amount to frame my trades, or if I just sit on my hands until the market provides me with the opportunities I know.

Swing Trades

No trades were framed for Friday, 8 June 2018. Six positions were closed: KR, XME, AXP, DWDP, JPM, EWW. Total return for the 6 trades: +3.85R.

Only 2 positionsin the portfolio showing +1.09R.
Long: GILD.
Short: AA.