System Development

[Soverus Khan]

http://www.trading-lab.com/forums/yo...552.html?t=552

Style as opposed to strategy, but I think most have disclosed both on these threads.

System is uncovered in the post below:

I trade my retail account that has been built up over the years. This provide me the ability to leverage large blocks of highly volatile stocks to produce income. This money could be passively invested, use as venture capital, or used to buy a franchise. I choose to use it as an income generating base as I see the markets as the ultimate arena of brains, guts, discipline, and opportunity. From the profits come lifestyle and investing needs. This base was built first by swing trading (several systems) until I reached a level to intra-day trade with size.

The "value" of my time is of prime consideration. I would rather spend a "relatively" short trading day than 14 hours building a brick and mortar, chasing tennats, or schmoozing customers.

Investing for the long term is value based and consists of the large cap, dividend producing stocks with attention paid to sector cycles...I do not use forums for "investment" discussion.

I trade stocks. I trade about 5 -10 different stocks on a daily basis depending on the setup presented. I complete between 5 and 30 round trips a day and close all positions by the close.

I trade opening gaps on a few select stocks and then trade chart set-ups on the remaining "big boys" throughout the day.

I have used most of the indicators available. I have studied, built systems, tested, re-tested, backtested, forward-tested about 1000 approaches. I have found myself coming full circle in this education. That knowledge is absolutely invaluable in my current trading, but I do not use indicators as triggers or "picks". My screens are all statistics based (except for investments...different approach).

My trade setups are based on probablility, risk to reward, support and resistance (intra-day). Price and volume finally presented itself as the "lightbulb" to consistency. Simple, but painfully earned.

I trade 1 to 5 minute scalps or longer as the trade materializes. I "scale in" as the trade plays in the direction forecasted. I trade a large block on the initial buy and then smaller blocks as the trend continues and my profit "cushion" increases. Rigid "mental stops" are ruthlessly enforced. Again, another painful lesson with the cost of tuition. I DO NOT average into losing positions (won some, lost many).

Goals with current system is consistency and increased scalability. I trade smaller sizes when I experience an increased number of losing trades. Market changes....CHANGE WITH IT!

"Painting the picture". I use 1, 5, and 15 minute candle charts on the stocks I trade. I use S&P and NAZ Comp on the 5 and 15 minute charts for overall direction. Bloomberg as the intra-day news source.

A journal is a form of discipline that (for me) is the best data collection system I know of.

I have begun trading the ES on a sym and I will likely move to that instrument as my only trades during the day. Same setups, same approach. Tough to do in real time while trading my real acount, but patience (telling myself this over and over!).

I struggle with position and swing trades. I have been successful, but my methods and abilities show low probability and very low risk/reward in regards to time spent studying ( I have a life). Too much noise for me. I also realize I begin to lose mental discipline and have a hard time sleeping even with a low value swing.

Swinging a massive position for an intra-day scalp is less stressful than holding a small overnight swing for me!!!! Hats off to those who master it.

I know what works for me. I try to "pay it forward" when I can. I've made live calls on a couple different chats, but that is only when I have the time or the "cushion" to drop my focus and share some info.

Damn that was long winded!

Khan.

[Leth]

Khaun, excellent post of your insight and methodology; enjoyed it thoroughly!!!

[Soverus Khan]

Anyone take signals from indicators only?