Monday, July 28, 2014

28/07/2014 About System 2 and Overall Position Management

SYSTEM 2  is basically as follows:

Underlying: Traded on AEX 60 min chart.

Entry: when market is within 0.3% of upper or lower bollinger band. Enter gradually.(i.e. Enter half around 0.5% distance, half around 0.3%, little subjectivity wrt to the speed of the market and the distance to MA 20/MA 50)
I want to avoid any subjectivity in the systems, but I have the feeling that there has to be little bit of subjectivity to finetune any system.We will see via the results whether I will be a strict follower of the numbers in the end.

Stop: 1,5 points below the lower bollinger band at any time.
The bollinger band levels change by time.So the stop is dynamic as well.

Exit 1 %30: Within 0,1% of MA20

Exit 2 %30: Within 0.1% of MA50

Exit 3 %40: When MA20 crosses MA50 in the opposite direction.

Optional:In case there are open positions are on the other side of the trade keep 20% till it is stopped or no other open trades left.

Below you can see the partial entry I made around 404,2.The market tried but failed couple of times to go lower.There was a nice distance till MA20(0,9%) compared to lower band (0,45%).

At the current situation I have Exit 3 left from the previous short trade but as mentioned above,  I need to keep it as I have Exit 2 long left from DAX System 1 and as I just got into a new long position on AEX System 2.

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