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Bisby1

WELCOME Bisby

Single Cylinder Trading System

Test Site

 

Work in progress...check back every so often...

 

I have two goals in sharing this system.
      1. To have a framework from which to discuss trading systems development.
      2. To improve this particular system by active collaboration.

 

Outline:

  1. The General Concept
  2. Goals
  3. Modules
    1. Spreadsheet
    2. Charts with indicators
    3. Cheatsheet decision trees Long/Short, Trending/non-trending, invalid
    4. Entry/exit (market) rules, gap rules, pre-market conditions, 15 min rule
    5. Results
    6. Daily schedule (how to do it)
    7. Instruments to trade (stock picks for toolbox)
  1. Testing Methodology
  2. Results and feedback system

APPENDIX: Interest rate calcs spreadsheet

 

GOALs

1)Make 100% return on equity per year

2)Must take 2 hours or less per day to do

      1. Must be safe, high win rate, low drawdown
      2. Must be simple, easy to understand and follow

        3.  

        see example: enlarge image

         

        the basic idea...

         

         

        about the calculations...

         

        the original idea for cylinder system (a Microsoft Word 97 document)

         

         

        a real trade...

         

         

        entry...

         

        The Next Step: I would very much like to backtest the system in a professional manner.

        Any input on testing is very welcome....

        This will enable me to have confidence in the system and to solidify its rules.

        MEMBERS: PLEASE SEE PROPOSED FIRST BACKTEST

         

        Also please note that I resurrected some more files and renamed old garbled names to more meaningful ones: new files

         

        Check out www.angelfire.com for server space to post images. It has an uploader...easy to use... (FREE) [click on "build a homepage! : signup]

         

        NOW where was I... oh yeah..

        Concept:

        We notice that many stocks with good liquidity have a large, regular

        Range (i.e. bulls push it to one extreme, bears to the other extreme)

        Over a two day period. We set out to determine if we could capture this range. No matter what is happening with the microtraders and

        Daytraders when a two day period is over we have moved between

        Two extremes. Max Bull Power/Max Bear Power. Instead of looking for "setups" we set "traps" at these extremes with buy and sell orders. If an individual stock reaches our pre-determined trigger point (with its pre-calculated risk/reward) we trade. Otherwise we won't. We then wait for it to move back close to its other extreme and close the position with a limit order. Protective stops are always

        Used. By having several stocks or instruments in our "toolbox" we can get 3 or 4 "traps" per day. From our experience, we find that we get a "hit" of about 1 per day. Working through the interest rate calculations and expectancies we find that 1 per day with a risk/reward of 1:1 or better does indeed give us 85-100 % per year.

         

        Testing:

        We test the system by forward testing. Backtesting was very time consuming and tedious because we must look at both daily and intraday for each chart. (Studying the old charts visually did give us some confidence though.) We set up the system and started trading with very small lots to build up performance data and history.

        Adjustments were made to the system as we went along. Primary things that have been tweaked:

        1)entry points

        2)profit targets

        3)decision tree diagrams

        4)indicator parameters

      3. execution rules

All trades were recorded and the risk reward (ongoing expectancy) was calculated. In particular the last 10 day increments of % wins &

Expectancy was kept in graphical form to make sure we were on track.

Next:

 

work

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