Trading Update - 3

I believe I finally have something usable that trades 5m bull flag setups with high accuracy. I have been letting it paper trade for weeks now and just recently got it to what I’d consider “tradable”. It took months of learning how to code a strategy that would have the proper entries, exits, and stops. Not to mention the numerous bugs that caused it to exit trades too soon or not trade certain flags at all.

I am no longer making modifications to the algo, so from this point forward I plan to log a minimum of 20 paper trades to find out its accuracy and how profitable it is with small positions. If I am satisfied with the results I will then trade my live Interactive Brokers account in the coming weeks. Each trade seems to work in one of two ways: it makes an unbelievable gain that I never thought would work, or it gets stopped out quickly for a small loss.

I will be logging all of the trades it makes below, good or bad. I also plan to record the trades and upload them to YouTube like I have been.

P/L: $84.42
Wins: 7 46.67%
Losses: 8 53.33%
Break Even: 5 40.00%
Wins + BE: 12 60.00%
Trades: 20

Break even trades mean the stock went up at least 15c over the entry and it moved the stop to break even.

10/12/2018
These two trades below were made Friday at almost the exact same time and both worked perfectly with it almost catching the exact top both times. Before this day it made a couple mistakes (stopped out due to a bug / trading a setup with terrible volume) but also had some nice gains. The winners were always bigger than the losers despite these issues.

Unfortunately, I was not recording when it made these trades so I can’t show them in real time.

$ATXI 5m/1m candles
$FNKO 5m/1m candles

Week 1 - 10/15/2018
Not a whole lot going on today besides $YGYI having some nice 1m flag setups. It traded $NBEV twice. One loss in the morning and one small gain around noon. Not a great start to the week but the risk/reward is always good. Let’s see what happens tomorrow!

$NBEV 5m/1m candles



10/16/2018
$NDLS was very choppy and slow. It got out break even when it spiked into $12.99 and came back down to the entry. No gain or loss on this one. I’m not planning to upload a video of it because the entire flag just went sideways forever until finally breaking over $13.00 after a strong dip.

I manually traded two different flags on $FFHL which was fun. There’s really not a lot going on this week so far. That just means it’ll take longer to get the 20 trades. It’s good because these are worst case scenario trades. Earnings season is coming up so there should be some good opportunities.

New TWS theme in the beta release! I dig it but they need to fix some of the chart bugs and add premarket/after hours shading.

$NDLS 5m/1m candles

Update: I actually see a perfect bull flag on $ALT but it was not traded because the volume on the next candle was higher. I added a separate algo that changes that check. It will now trade them both separately so it will not change the results of this “forward test”. I’ll start logging those tomorrow in a separate spreadsheet.

10/17/2018
Yet another boring day. It traded $QNST but was not getting filled so I moved the order up slightly. The stock ended up moving quite a lot but could not get over $14.95 so it sold for break even. If this was real money I would have sold into the first push to that level or dumped it when it made the lower high. This trade and yesterday’s trade could have been winners if I decided to get out before the stop was hit. Not bad I guess.

No video for this one again. It’s just too slow.

$QNST 5m/1m candles

A little later it took a decent flag setup on $HEAR. This stock always has big moves which is nice. Got a little push into $22 then it dumped hard. Algo exited for a $2 gain, but that was with only 25 shares. Not bad. Could have easily been a win if I were managing it.

$HEAR 5m/1m candles

Another slow stock. I’ve seen this exact setup work last week. Unfortunately, this one did not. I think if it managed to get over $3 it would have ran, but I guess there’s just not enough volume. Decent exit since it gave it lots of time and got out on a spike.

$OMED 5m/1m candles

I actually saw a lot of halts late day so small caps might be heating up again. Eventually there will be one where it makes a crazy gain. It has before and it will again. Just grinding for now.

10/18/2018
It traded $PYX early in the morning. I’m starting to wonder if this is even going to work now because all the traders are now watching Chinese stocks and ignoring everything else. It’s also not as volatile as it was last week. The setup is perfect but that doesn’t matter. I’ll probably increase the volume requirements in the scan after I get 20 wins/losses. Flags seems to be crappy this entire week so I may need even more than 20 to determine an accurate win/loss ratio. Last week was amazing.

$PYX 5m/1m candles

A few minutes later $ACRS. Decent setup but got stopped out for break even. A little squeeze up to $11.84 which I could have sold into so technically a win if I managed it.

$ACRS 5m/1m candles

10/19/2018
This whole week has been rather boring.

It traded $VTVT and got a nice move over $4.00 pretty quickly. However, it was yet another break even trade. I think because small caps are kind of weak (besides the China sector) it’s only able to get 15-20c out of it and dumps quicker so there’s never an exit indicator. Basically what I’d have to do is change the profit target to like +30c / 3% instead of what I have now. That would make all of these break even trades winners. I’ll have to either change it when the markets slow or manage it myself.

It traded it again on the next flag but barely got a move out of it this time. I probably would have sold it right away for a $1 gain or something.

$VTVT 5m/1m candles

Winning percentage is actually decent (72%) if the targets are lower which means there’s usually a move right after it enters. It’s just getting stopped out when it comes back down because the moves they make are generally too weak. I wrote extra code that can be manually toggled for when the market is slow and it’ll have lower targets + move the stop above break even so it will more likely have some gain. I will not have that enabled until I get 20 trades.

Let’s see what happens next week.

Week 2 - 10/22/2018
No trades. I wasn’t here so I don’t really know how the day looked, but it seems like the shipping stocks were hot today.

10/23/2018
I was not here again. However, it managed to nail $PTI for a big win like I said it would eventually. Always feels nice to get a big win out of a trade while you’re sleeping.

$PTI 5m/1m candles

Decent setup on this one but ultimately failed. Plenty of time to get out for a small win if I managed it.

$CASI 5m/1m candles

Small pop that I could have sold into. Still seems like small caps are a bit weak. Break even trade.

Traded it again a few candles later just like $VTVT last week. It chopped around for a long time until the algo moved the stop. Got out for a small win which wiped out the previous loss (which would have been a win if I managed it). I’m not quite sure how this didn’t get stopped out despite hitting the stop loss exactly. Maybe it needs to tick below and since previous candles technically went below it so maybe those trades came in late and it never triggered, or maybe at IB it needs a full “tick” below so it needs to hit 1c lower (stop at 3.01, must touch <= 3.00).

$IGC 5m/1m candles

Only 4 more trades and I’ll have 20.

10/24/2018
No trades. I wasn’t able to start it until 10:30 so it’s possible it may have taken a trade earlier but we’ll never know.

10/25/2018
No trades. At this rate it’s going to take another week.

10/26/2018
I really didn’t expect this trade considering the entire market was being really whippy. Hit the target perfectly but for some reason the algo kept moving the stop to break even. I think it’s a rounding bug but that doesn’t matter. 3 more!

$YECO 5m/1m candles

Week 3 - 10/29/2018
No trades.

10/30/2018
$VCYT was part of another bull flag algo I modified to trade flags that have a little more volume on the pull back. Spreads were awful so no fill. It did get a decent 20c move so it could have been a win. This will not be counted since it’s a slightly different pattern.

$VCYT 5m/1m candles (no trade)

Couple minutes later it bought $DRYS which is part of the garbage shipping stocks that rarely make moves nowadays. I will probably make it ignore these simply because they never go anywhere but down. I’ll still count this one. I just hate this market right now.

$DRYS 5m/1m candles

10/31/2018
Last day of October. I’m hoping next month picks up because this one has been awful.

My separate volume algo tried to buy $DBD but no fill due to crappy spreads. Really nice setup and it would have hit the target too.

No other trades. My volume algo seems to be doing OK if it could get filled.

DBD 5m/1m candles (no trade)

11/1/2018
It would trade another shipping stock wouldn’t it. This time $GLBS which is just as bad as $DRYS from earlier. They are permanent shorts for me. Got a decent move from the entry of $10.17 to $10.50. No idea if there was enough time to even exit for a profit. Spreads were horrible.

Later it actually managed to hit the target. Impossible to trade.

$GLBS 5m/1m candles

About 10 minutes later, $SPAR. IB changed the stop orders slightly so it did not get out exactly where it wanted to. There’s a new flag you have to set called OpenClose and it needs to be set to C. It would have been a loss no matter what so that doesn’t matter.

$SPAR 5m/1m candles

20 Trades Later

I finally have 20 trades and the data does not look good for this strategy. The week I wrote this post about testing bull flags the entire market started dropping and got really weak. There were several days where it made no trades at all. The market does appear to be getting a little stronger. I can tell from the number of trades and stocks gapping up in premarket today.



Disclaimer

I am not a registered financial adviser/broker/anything. Use this information for entertainment/informational purposes only. Any tickers mentioned are not recommendations to buy/sell/or sell short. They are used as examples only.

Please remember that past performance may not be indicative of future results.