Archive for February, 2010

Daily Posts Transferred…

Monday, February 8th, 2010

Just a reminder to those readers checking in for the latest daily chart and trade report. These posts have now been transferred to:

3 Feb 2010

Thursday, February 4th, 2010

I will be continuing the daily posts for the "small capital account" project on the TradeOnAuto web site.

Click HERE to see today’s chart and trading results.




Wednesday, February 3rd, 2010

TradeOnAuto had a win today.


1 Feb, 2010

Monday, February 1st, 2010

No trade today.


Growing a Small Capital Account – Project Restarted

Monday, February 1st, 2010

Most trading products give you back-tested results. Frankly, they are not much good, because it is easy to optimize a strategy to do well in the past. What really matters to you is what happens in the future…

I prefer to document live trading results. I can’t know for sure what the outcome will be, but I’m confident that TradeOnAuto will show excellent returns over time.

TradeOnAuto finds and executes breakout trades in futures markets. Within this broad context, the trader is free to customize trade parameters using the TradeOnAuto control panel, although the product does come preset with parameters specified in my book (Day Trading Grain Futures).

The standard settings have worked well for a long time and yield good results. Being aggressive, they work best with an account large enough to withstand draw-downs resulting from a run of losing trades.

Before I began developing TradeOnAuto I was working on a project to modify my strategy to suit traders with small accounts. That project was set aside while I worked on software development, but now I propose to reactivate it.

The main goals of the system I want are:

  • Return an average of 5% per month.
  • Low volatility with maximum 20% draw-down.

With these goals in mind, I have set up my TradeOnAuto control panel with settings which, based on my experience, should have a good chance of achieving these aims. I’ll trade the wheat market, possibly switching to corn if wheat gets overheated.

Be warned, this is a "dull" strategy. Large wins have been foregone in favour of smaller, more consistent gains. There will be several "No Trade" days because if the setup I am looking for doesn’t occur, I won’t trade.

Based on what clients are asking for, I have begun the project with minimal trading capital, just A$5,000. This is not much for trading futures – there is little margin for error. The account could easily be wiped out by a series of losing trades, especially if risk is not managed carefully. No winnings will be withdrawn from the account, because I want to take advantage of the compounding effect.

If TradeOnAuto CAN average 5% per month, that will be no mean feat. A Wall Street fund manager making those kind of returns would be regarded as a hero, although I acknowledge it is much more difficult with a large fund where  every trade can move markets.

I’ll show the profit or loss made on each trade, but I won’t be making things easy for the opposition by specifying the specific strategy on the blog! I’ll just show the chart and my result. (Clients with a current TradeOnAuto license on request may request a copy of the settings.) Note that the profit or loss figure shown at the top of each chart is in US dollars and includes brokerage costs.

This is very much an experimental strategy, so we’ll see how it goes. If you have a larger account, I recommend the strategy settings in my book, which have performed steadily for years but have greater volatility. You can use the daily charts on this blog to practice your trades.