Joe's Journal

[Joe T]

Patience...

So, gold shoots up to 1265 today, and my equity goes down and I trigger yet another short position, and doubt sets in. "Why am I shorting when I'm telling everyone I'm bullish on gold?"

Well, I can't guarantee that the shorting strategy is perfect - it's less refined than my BUY strategy. But the answer to my question came after price dropped by almost $35 and I closed out of two positions and am positive in another. Equity rebounded, and now I'm better off than the last time price was at these levels.

I need a nice retrace down, though, so I can get into BUY territory.

Now for a couple side notes: I developed this strategy as I went along. I back-tested a general version of it, but did not seek to optimize take-profit targets, the correct break points to go SHORT and go LONG. I am hoping to slowly but surely work through some old charts and try to come up with such an optimization. This will take time, but if and when I make any adjustments I'll let you know.

The strategy won't change. But selection of of certain targets may. The convention of selecting a take-profit right now was somewhat arbitrary and seemed to work OK, but I may find that it leaves money on the table at certain levels.

I always want to be taking a close look a tthings to make sure what I'm doing makes sense.

[Joe T]

I received a question on my last position, so I decided to document any actions I take for a little bit here to help people understand what I'm doing using actual market examples.

In order to do that, I need to provide a backdrop to my current positions:

1) I have 3 old short positions on gold that have nothing to do with this strategy, which are simply a carryover from an old trading technique. In retrospect, holding on to them seems to have not been a great idea. The plan here is to dump them after a major retrace (I'm assuming one will come at some point) and cut my losses. These positions are 0.01 lots each at 956.55; 963.90; 972.00. I provide this in the interests of full disclosure because these positions contribute to current equity positions.

2) I have 1 old long position on USDJPY that also has nothing to do with this strategy, 0.01 lot @ 95.00. I'll probably hold this until I can take a small profit. Again, just putting this out there since it contributes to current equity position.

-----

3) Before I tweaked my strategy to set my buy/sell points by a 99% calculation, I simply traded at every $10. On May 5, the lowest such short point was $1165.00. This order was filled on that day. If you look at your charts, price went as high as 1249.28 on May 14, so I had a number of short orders. We then saw a retrace, so I took profit on ALL outstanding short orders except for that $1165.00 point. Price reached a low of $1166 on 5/21, so my $1165 sell order was not closed. After that point, price increased and has not come back down to the $1165 level, so I am stil carrying that position.

-----

4) As noted above, a new high was established on 1249.28, and then price subsequently retraced beneath the levels of the previous high. Once that retrace occurred, I reset my buy/sell levels from that point. All shorts currently at 0.01 lots. Buys set according to spreadsheet - either 0.01 or 0.02 depending on capital position.

Going up:
SELL LIMIT @ 1249.28
SELL LIMIT @ 1249.28 / 0.99 = $1261.90
SELL LIMIT @ 1261.90 / 0.99 = $1274.65
.
.
.

Going down:
SELL LIMIT @ 1249.28 x 0.99 = $1236.79
SELL LIMIT @ 1236.79 x 0.99 = $1224.42
SELL LIMIT @ 1224.42 x 0.99 = $1212.18
SELL LIMIT @ 1212.18 x 0.99 = $1200.05
SELL LIMIT @ 1200.05 x 0.99 = $1188.05
BUY LIMIT @ 1200.05 x 0.99 = $1188.05
BUY LIMIT @ 1188.05 x 0.99 = $1176.17
BUY LIMIT @ 1176.17 x 0.99 = $1164.41
.
.
.

I won't get into the take-profit here at the moment.

5) When those entry levels were reset, there were outstanding positions at the old entry levels. We let those ride out and close them as we can, and then submit a new order at the new levels as shown above. As I stated earlier, everything closed out except my $1165 order, so at some point I was able to close the others out and enter orders as above.


On the next post, I will go through all the trades based on this run-up to the new high, and all activities since then.

[Joe T]

(1) 05/14 13:28 sell 0.01 1246.51 t/p 1228.45
(2) 05/14 17:40 closed (1) @ t/p +18.06
(3) 05/14 18:33 closed an outstanding position manually @ 1228.54 (+2.93) - [5/11 22:01 sell 0.02 1230.00 t/p 1210]
(4) 05/14 19:08 sell 0.01 1235.01 t/p 1220.02
(5) 05/17 19:19 closed (4) manually @ 1226.79 +8.22
(6) 05/18 15:11 closed outstanding position manually @ 1210.26 (+9.75) - [5/11 15:30 sell 0.01 1220.00 t/p 1202.50]
(7) 05/18 21:19 sell 0.01 1224.42 t/p 1212.36
(8) 05/19 05:23 closed (7) manually @ 1214.41 +10.01
(9) 05/19 17:01 closed outstanding position @ t/p (+15.51) - [5/11 13:36 sell 0.01 1212.00 t/p 1196.50]
(10) 05/19 18:15 closed outstanding position manually @ 1195.11 (+5.90) - [5/10 16:27 sell 0.01 1201.00 t/p 1188.25]
(11) 05/19 18:52 buy 0.01 1188.05 t/p 1191.05
(12) 05/19 19:05 closed (11) @ t/p +3.00
(13) 05/20 08:58 buy 0.01 1188.05 t/p 1191.05
(14) 05/20 10:46 closed (13) @ t/p +3.00
(15) 05/20 14:25 closed outstanding position @ t/p (+10.27) - [05/06 18:38 sell 0.01 1191.00 t/p 1180.75]
(16) 05/20 15:06 buy 0.01 1181.40 t/p 1191.05
(17) 05/20 15:20 closed outstanding position manually @ 1180.66 (+0.36) - [05/06 13:01 1181.00]
(18) 05/20 15:29 buy 0.02 1176.17 t/p 1182.14
(19) 05/20 16:00 closed (18) @ t/p +11.94
(20) 05/20 16:18 sell 0.01 1188.05 t/p 1185.08
(21) 05/20 16:26 closed (16) manually @ 1186.70 +5.30
(22) 05/20 17:15 buy 0.02 1188.05 t/p 1191.05
(23) 05/20 17:27 closed (20) @ t/p +2.97
(24) 05/20 18:02 sell 0.01 1188.05 t/p 1185.08
(25) 05/20 18:06 closed (22) @ t/p +6.00
(26) 05/20 19:50 closed (24) @ t/p +2.97
(27) 05/20 19:53 buy 0.02 1183.94 t/p 1191.05*
(28) 05/20 20:22 sell 0.01 1188.05 t/p 1185.08
(29) 05/20 20:34 closed (28) @ t/p +2.97
(30) 05/21 04:45 buy 0.02 1176.17 t/p 1182.14
(31) 05/21 04:49 closed outstanding position @ t/p +6.03 - [05/05 17:45 sell 0.01 1174.00 t/p 1168.00]
(32) 05/21 12:14 closed (30) @ t/p +11.94
(33) 05/21 15:55 buy 0.02 1173.94 t/p 1182.14*
(34) 05/21 16:52 closed (33) @ t/p +16.40
(35) 05/21 20:05 buy 0.02 1176.17 t/p 1182.14
(36) 05/24 03:01 closed (35) @ t/p +11.93
(37) 05/24 08:02 sell 0.01 1188.05 t/p 1185.08
(38) 05/24 11:52 closed (37) @ t/p +2.97
(39) 05/24 16:02 sell 0.01 1188.05 t/p 1185.08
(40) 05/24 18:08 closed (27) @ t/p +14.20
(41) 05/25 03:56 buy 0.02 1188.05 t/p 1191.05
(42) 05/25 05:57 closed (41) @ t/p +6.00
(43) 05/25 09:28 buy 0.02 1188.05 t/p 1191.05
(44) 05/25 11:01 closed (43) @ t/p +6.00
(45) 05/25 17:28 sell 0.01 1200.05 t/p 1194.08
(46) 05/26 12:14 sell 0.01 1212.18 t/p 1203.17
(47) 05/28 18:12 closed (46) @ t/p +9.02
(48) 05/28 20:22 sell 0.01 1212.18 @ t/p 1203.17
(49) 06/01 15:06 sell 0.01 1224.42 t/p 1212.36
(50) 06/03 15:16 closed (49) manually @ 1216.61 +7.82
(51) 06/03 19:28 closed (48) @ t/p +9.02
(52) 06/04 18:55 sell 0.01 1212.18 t/p 1203.17
(53) 06/07 17:27 sell 0.01 1224.42 t/p 1212.36
(54) 06/07 18:43 sell 0.01 1236.79 t/p 1221.63
(55) 06/08 12:25 sell 0.01 1249.28 t/p 1231.00
(56) 06/08 22:15 closed (55) manually @ 1236.26 +13.02
(57) 06/08 22:16 canceled all pending buy/sell orders and submitted new orders based on the new high that was established (1251.84) on 6/8. Orders reset once the price dropped below the previous high price of 1249.28, which also occurred on June 8.

New schedule of entry values as follows:

Going up:
SELL LIMIT @ 1251.84
SELL LIMIT @ 1251.84/ 0.99 = $1264.48
SELL LIMIT @ 1264.48 / 0.99 = $1277.26
.
.
.

Going down:
SELL LIMIT @ 1251.84 x 0.99 = $1239.32
SELL LIMIT @ 1239.32 x 0.99 = $1226.93
SELL LIMIT @ 1226.93 x 0.99 = $1214.66
SELL LIMIT @ 1214.66 x 0.99 = $1202.51
SELL LIMIT @ 1202.51 x 0.99 = $1190.49
BUY LIMIT @ 1202.51 x 0.99 = $1190.49
BUY LIMIT @ 1190.49 x 0.99 = $1178.58
BUY LIMIT @ 1178.58 x 0.99 = $1166.80

(58) 06/09 18:12 closed (54) manually @ 1224.21 +12.58
(59) 06/10 17:16 closed (53) manually @ 1219.79 +4.64
(60) 06/11 15:40 sell 0.01 1226.93 t/p 1214.84
(61) 06/14 19:16 closed (60) manually @ 1219.11 +7.82
(62) 06/15 15:31 sell 0.01 1226.93 t/p 1214.84
(63) 06/17 15:12 sell 0.01 1239.32 t/p 1224.14
(64) 06/18 14:42 sell 0.01 1251.84 t/p 1233.53
(65) 06/21 10:57 sell 0.01 1264.48 t/p 1243.01
(66) 06/21 19:51 closed (65) @ t/p +21.47
(67) 06/21 20:05 canceled all pending buy/sell orders and submitted new orders based on the new high that was established (1265.05) on 6/21. Orders reset once the price dropped below the previous high price of 1251.84, which also occurred on June 21.

New schedule of entry values as follows:

Going up:
SELL LIMIT @ 1265.05
SELL LIMIT @ 1265.05/ 0.99 = $1277.83
SELL LIMIT @ 1277.83 / 0.99 = $1290.74
.
.
.

Going down:
SELL LIMIT @ 1265.05 x 0.99 = $1252.40
SELL LIMIT @ 1252.40 x 0.99 = $1239.88
SELL LIMIT @ 1239.88 x 0.99 = $1227.48
SELL LIMIT @ 1227.48 x 0.99 = $1215.20
SELL LIMIT @ 1215.20 x 0.99 = $1203.05
BUY LIMIT @ 1215.20 x 0.99 = $1203.05
BUY LIMIT @ 1203.05 x 0.99 = $1191.02
BUY LIMIT @ 1191.02 x 0.99 = $1179.11

(68) 06/21 20:11 closed (64) manually @ 1240.93 +10.91


Notes: The (*) denotes situations where I wasn't monitoring after a position closed, and when I checked in the price was back below the level where I would have entered had I submitted a limit order. In these cases, I just entered immediately at the lower price, keeping the t/p the same as if I had entered on my limit order.

Positions are closed manually as a matter of judgment. You may wish to not intervene at all and let the take-profit levels get hit. I usually close manually in a few different situations: (1) if I'm near the t/p level and will be unable to monitor, I will close so I can get a new limit order in and not worry about missing that opportunity; (2) a gut call on whether or not it looks like price movement has stagnated and may be reversing, and I'm in the mood to protect profits, and (3) after I've calculated new entry points, I often want to just exit current positions at any profit at all to get my new limit orders in at the new entry points. I wouldn't have to do that, either, but sometimes I just want to move that process along.

[Joe T]

(69) 6/23 17:00 closed (63) manually @ 1227.61 +11.71
Reason: Quick checked my platform when arriving at work, and saw that it had fallen sharply to near my take-profit level of 1224.14. At the point I closed it there looked to be a price reversal possibly occurring. I have some meetings this morning and will be unable to monitor, so I took the profit and then entered a new sell limit order for 0.01 lots @ 1239.88, t/p 1227.66.

Spreadsheet: due to realized capital gain, my BUY schedule is adjusted as follows: 0.01 lots at the first three BUY points (top one at 1203.05). 0.02 lots from that point on all the way down to 954.76, with one exception: 0.01 lots at 1066.37. Based on current capital, my calculated highest price for my sell orders is 1485.88. This is the point where a straight-line increase in price that executes continued short positions with no retrace puts my account at zero.

[Joe T]

I entered what I'll call a random trade on USDJPY, long 0.01 lots at 89.47. This has nothing to do with the strategy, just offering that in the interests of full disclosure. It's an area of some past resistance near historical lows. It's the only other pair I've kept an eye on over the last few months.

[Joe T]

(70) 6/24 17:36 sell 0.01 @ 1239.88, t/p 1227.66
(71) 6/25 14:59 sell 0.01 @ 1252.40 t/p 1237.05

[Joe T]

(72) 6/28 18:59 Closed (71) @ t/p +15.35

I've entered a sell limit order with the same entry/exit points (1252.40, t/p 1237.05).

I've adjusted my lot sizes, since I just realized a profit. For buy orders based on a zero balance price point of $950.00, with potential entry points are 954.76 to 1203.05. 0.02 lots on all points, except the following (which are at 0.01 each): 1203.05, 1191.02, 1179.11, 1045.14, 954.76. All sell orders are at 0.01 lots. The current zero balance price point in that direction is 1486.47.

[Joe T]

(73) 6/29 16:51 closed (70) @ t/p. +12.22

Price is whipping around today. On a downswing, my take-profit hit. After checking in and seeing this happened, I entered a sell limit order back at the same level: sell @ 1239.88, t/p @ 1227.66.

Since I added capital, my buy order lot sizes adjust as follows: change my 1045.14 order point from 0.01 lot size to 0.02. Change the 954.76 order point from 0.01 lot size to 0.02. [These will differ for you, depending on your target zero balance point and available capital]

[Joe T]

(74) 6/29 19:01 sell 0.014 1239.88, t/p 1227.66

It should be noted with the times I display that it's my Broker's time. I'm too lazy at the moment to figure out what it is relative to GMT, but right now it's just past 11:00 Central Time in the U.S. and my platform time reads just past 19:00.

[Joe T]

(75) 7/1 17:41 closed (74) @ t/p, +12.23

*the lot size in (74) was a type - should have been 0.01. New sell limit order placed at 1239.88 with same t/p.

(76) 7/1 18:58 closed (62) @ t/p, +12.12

Placed new sell limit order at new levels of 1227.48 with t/p 1215.20


I'm enjoying a long holiday weekend, so I'll type up my month-end results soon.