George II - Notices (2007)
(12/31/07)
There was no trade today. I just want to add one more element to this system, which is not that new at all as I have been mentioning it here for many months starting in mid 2006, if I recall it correctly. Namely, whenever the market jumps over the entry level before the daily session open at 9:30 EST and does not return to the entry price during the first hour of trading, we want to enter on the breakout of the first hour range in the direction indicated by the system. The last time such an opportunity took place was on 12/27/07 and this happened in ES. You can see here how it would have played out, had we taken the trade according to the above directions. In ER2, the last opportunity like that occurred on 11/13/07 (see my comment below) and using this type of entry would have given us over 8 pts in profits. I suggest using the standard size of the stop-loss for both markets. If shaken, a re-entry makes a lot of sense too. There are only a handful of opportunities like that in each market a year, but they tend to be quite profitable and therefore it makes sense to take advantage of them. I always look for opportunities like that. I believe that everyone can benefit handsomely from them, including other markets (YM, NQ) as well, even if they decide not to take all the trades the system proper calls for, but only those. I would call it the simplified version of the system. With a few trades like that a year, you stand a good chance to make 15-25 pts in each market, which is not that bad. Certainly good enough to justify the price of the system.
(12/27/07)
Wow! Looks like Mr. Market wants to become friends with us in 2008. Okay, why not. As long as he delivers 20 pts or so as was the case today, we are very much open to it. Another positive year for this system, even after the slippage and commissions are taken into account!
(12/18/07)
Another good day with a winner that was rather unexpected. Just a bit over 2 pts, but who can complain about more than 200 bucks per contract. And, moreover, we are again over 20 pts for the month. It's very unlikely we will lose this month.
(12/11/07)
You know... I really don't think that Mr. Market is such a bad fellow. Yes, he can be moody, which only enhances his ability to piss me off, but he does have good, charitable, days too. Like today... Obviously, the fact that it was a Fed day helped a bit too in creating a selling frenzy which the system exploited quite nicely adding well over 20 pts to the total profits for the month. So maybe, just maybe, not all hope is lost for Mr. Market ...
(12/05/07)
The crazy swing down in the afternoon allowed us to enter a trade that produced almost 7 pts, so we are now in the black for the month. Let's hope things stay this way till the end of the year.
(12/03/07)
The first trade of the month was not a success, as we got stopped out, but a re-entry would have given us about 5 pts. I don't count re-entries towards total profits. I may use this data to improve the system if there is solid evidence that re-entries help. So far, this seems to be the case, although not a very strong one yet.
(11/26/07)
Today, Mr. Market told me that he would marry me if I were not a man. Yes, he is obviously losing it completely. I am guessing that he did that to cover yet another embarrassing day. He lost again and although it was a relatively small loss, it happened around the time we were more likely to reverse, so it was particularly humiliating. I was somewhat surprised that we even got to that level. The trend continued though and we added a few more points. We passed the 60 pt mark today rather easily.
(11/21/07)
Yet another good day. Mr. Market has broken down completely. Today he was almost sobbing. Nothing seems to be going his way this month. We added over 10 pts today to our already sizeable monthly profits and not only did we cross the 50 pt barrier this month, but we are even over 55 pts for the month.
(11/13/07)
The market rose considerably before the daily session open crossing over the entry line and never returning to it. Had we got a chance for a fill, we would have added well over 15 pts. Looks like Mr. Market is trying to rig this game. Not the very first time, not at all... On a more positive note, it was possible to enter a trade in ES. The result? Nearly 30 pts! Yes, it does look, and I am saying it again, that this system is doing much better in ES this year than it did a year ago, which also proves that not all years can be equally good. This seems to be the case in ER2 as well. In this market, the system has been struggling since the very start of this year and yet it did quite well last year. Generally, the longer you stay with the system, provided it is a good one, the more likely you are to collect profits. Unfortunately, systems, even the best ones, go through drawdowns whose depth and time span are hard if not impossible to predict, which makes using them very challenging both mentally and financially.
(11/12/07)
I was already beginning to think that maybe, just maybe, Mr. Market wanted to become friends. It even looked like that today. At least, at first when we made it successfully through the entry point and things were looking good, but then... Well, apparently he changed his mind. So... we are now a bit down, but only 3.5 pts, and we can still get through the 50 pt barrier this month. Or so I hope.
(11/09/07)
I am so predictable this month... Yep, another win. That poor sucker, who is now apparently in a full-blown desperado mode, had tried to rally in the late afternoon. On a Friday, when the rest of the world is holding their breath wondering if the Pakistanis are still in control of their nukes, when oil can apparently only go up and the once mighty dollar only down. Why would anyone want to hold onto their shares on a Friday afternoon these days? And (what a surprise!) they did not: the price plunged in the last half an hour of the daily session. Believe me, I tried to reason with this dude, but to no avail. When he finally does seppuku or something, please don't blame it on me. We are then a bit over 6 pts richer following today's trade and if it had not been for this loser to entertain a mini-rally in the last quarter of trading we would have crossed the 50 pt mark today. Yep, he can be vicious till the bitter end...
(11/07/07)
Remember how I hated to sound like a broken record just a few weeks back? Well, I am afraid I am beginning to sound like that again, except that this time it's about good news. Yet another winning trade that posted a bit over 10 pts in profit and we are now nearly 43 pts up for the month with 4 winners in a row. Poor Mr. Market. I hope he won't go postal...
(11/06/07)
One more trade and yet another victory in what seemed to be an easy win for our opponent, a distinguished old fart, Mr. Market. Nevertheless, he failed miserably this time as well losing over 4 pts in this battle. I am sure he is drinking heavily now and perhaps contemplating switching his religion to something even more evil. Still, there is no chance he is having an upper hand this month!
(11/05/07)
The beating continues, except that this time we are not on the receiving end. That loser, that imposter, that old fart, or Mr. Market in short, is finally getting justice served. I always suspected he was over-rated... Today we added quite a few points too and after 2 trades we up over 28 pts for the month. Let's hope this good trend lasts.
(11/01/07)
Man, that was one hell of the start of a month. We kicked the Old Bastard in the butt so hard right after the daily session open that he was nowhere to be found for the rest of the day. Good, the last thing we need is some cranky fellow to mess with our business! We scored well over 20 pts today, nice start to, hopefully, a very good month.
(10/31/07)
The last trade of the month was a loser. We got stopped out after the FED announcement by a huge spike down: over 12 pts within only one minute. I have not seen anything like that in this market yet. The re-entry was successful though and more than compensated for the loss. It looks like re-entries are doing a good job just as they did last month. This system with re-entries only might be even better than a standard one. I will have to examine that.
(10/26/07)
Now, did I mention what I think about Mr. Market? I guess, I did. Several times over the last few weeks, I believe, so even if today was another day to add to my sentiments, I will not do this. I will be a big boy. Yeah, totally... Screw you, I knew you would do it again, so what's the point even taking about it... But here is good news. Even though this Old Bastard (yep, from now on I will be capitalizing it) stopped us out today again, a re-entry gave us almost 12 pts and with 4 re-entries this month we would have added a bit over 7 points to the total tally, so it looks like the idea of re-entering after a stop that would have made last month look very good indeed seems to be working this month as well. But without re-entries we are over 16 pts down for the month. Ouch! I am suing someone when this year is over. Guess who?
(10/15/07)
Today was an okay day, a small profit of about 3 pts, but at some point we were up over 11 pts. Unfortunately, a strong 15:30 reversal messed things up completely...
(10/09/07)
Three more trades and... I am still correct. This bastard went back to his old tricks: 2 losers of 3.5 pts and one "winner." Yep, I had to put it in quotation marks as it was a whopping 1 pt or something. Man, this dude is really getting a serious beating from me when this year is over! Well, here is some "good" news (and, again, it's in quotation marks as it is not very relevant, at least, not any more): the system has been doing much better in ES this year from what I can tell comparing the action in both markets. For instance, today, the system scored over 6 pts in ES, which is, both point wise and dollar wise, much better compared to ER2.
(10/01/07)
Whenever I call Mr. Market "old bastard" he always outdoes himself trying to prove that he is not. That was the case this time around too because today to show just how unfair I am, Mr. Market delivered well over 10 pts in profits. Nice job, dude, but I still think that you need to try harder if you want to convince me that I am totally wrong... Okay?
(9/28/07)
I am afraid I am beginning to sound like a broken record, but I am really sick and tired of this month. The last trade of the month that took place today was pretty much as annoying and frustrating as the one that had preceded it. We got stopped out and then the market turned around and scored over 4 pts with us holding the bag already. If that's not mean, then I don't know what mean is. Here is what this old bastard (yeah, also known as Mr. Market) is apparently trying to tell us: the stop is too tight for the current level of volatility. One can either increase the stop or institute re-entering. I believe that the second option could be better and from now on I will report the results including this variant as well. I will also go back and see how this would have worked out in the past 12-18 months for which I have data. I will report this when I am done.
(9/24/07)
The same thing happened again. The system triggered the entry too early, the trade got stopped out before the market eventually followed the system direction, and instead of making well over 4 pts had we been more lucky, we ended up with yet another loss of 3.5 pts. This year is definitely not as good for this system as the previous one.
(9/18/07)
Today the system chose the direction well, but entered the trade way too early. That resulted in a loss as the stop-loss of 3.5 pts got triggered before the market took off in earnest following the 2:15 P.M. rate cut announcement. Re-entering then would have given us about 25 pts. Yes, sometimes life is not as perfect as we would like it to be. Or as fair...
(9/17/07)
Since my last post here, three more trades have transpired, the last one of which took place today. Unlike the other two, it was a wining trade of almost 5 pts. However, we are down for the month, but only 3 pts, so chances are we will still manage to close in the black when the month is up.
(9/11/07)
This time we also struggled quite a bit around the entry point where the market decided to take a break (great timing, Mr. Market!), but then we moved forward. A nasty 3:30 PM reversal took us down to the negative territory, but we beat the nasty and moved back up closing with almost 3 pts in profit. A lot of action and quite a bit frustration, but the outcome was different than last time.
(9/05/07)
The first trade of the month was no success. The market spent practically all the session flipping back and forth across the entry line and when it looked like we would be closing with a small loss or small gain, a sudden surge in the last 5 minutes stopped us out with a 3.5 pt loss. Pretty annoying, to say the least...
(8/31/07)
The last trade of the month was on a positive note. Sort of... We were up well over 7 points at some moment, but ended up with less than 2 because of the sell-off in the last half an hour. With the market not very stable, no one seems to be brave enough to hold to their positions over the coming long weekend. Well, the really good news is that it is yet another winning month, the third one in a row, and even slightly better than the last one.
(8/23/07)
After a remarkable good start we are now down to 7 pts following 4 consecutive losses, two of which have been rather unfortunate as we had been stopped out before the market moved in our direction. In one case we got stopped out on the highest tick and then the market moved into the positive territory. Tough and sometimes annoying...
(8/3/07)
This bad boy had a field day today scoring well over 20 pts. Yep, that's all in a single trade, the best trade ever recorded in almost twenty months. Way to go, Georgie boy, way to go! We are now less than 5 pts down for the year, not bad considering that the first five months of it were all negative.
(7/20/07)
Fortunately, that frustrating day was followed by the second best day this year and we are now up over 5 pts for the month. It could have been much better, though. At some point we had been over 17 pts up, but then the market reversed. I believe it makes sense to set up a maximum target for this system of 16.5 pts. Judging by the past data this seems to be the optimal target that is very hard to exceed and so taking your profits at this target is a good idea.
(7/19/07)
Another congested month again and after 7 trades, the last of which took place today, we are down about 6 pts for the month. Today we were up most of the time only to lose in the last 10 minutes, by about a point. Yeah, you would have been pissed off too.
(7/5/07)
The first trade of the month was a winner, unfortunately the second one, today, left us with a loss of 3.5 pts. We are still up about 2 pts for the month, so the start of July was not that bad.
(6/27/07)
Wow! What a nice day today. We added some nice profit today, scoring the second 10+ pt trade this year, even if just barely. With only two more trading days left this month (and this quarter), it is impossible to close the month (or the quarter) in the red. I guess, it pays off to call this dud "a bad dog" from time to time, to spur him to action.
(6/22/07)
We added about a point to the total profits today. At some point we were up about 7 points, but in the last quarter of trading we moved to the "red district." This market is still very, very congested. While ES was making a new low of the day in the last half an hour of trading, ER2 was firmly stuck in a range, making no attempt at a new low whatsoever. We are now in the positive territory for this quarter, but it's hard to tell if we will maintain this profit till the end of the quarter.
(6/20/07)
Would you believe what this bad dog did today? Well, it scored well over 12 pts! Finally, not a moment too soon! It was the first trade with over 10 pts in profit this year. Last year there were two trades like that per quarter on average, which is why we did so much better then. Well, perhaps not all hope is lost here yet. In any case, we are now over 9 pts up for the month and close to a breakeven for this quarter. One good profitable trade and we would post a positive quarter. Is it too much to ask for? We'll see.
(6/13/07)
Today was the first trade this month. The system seems to have given up if one is to judge it by how frequently it is trading these days. Unfortunately, since the market had to travel quite a bit before the entry was hit, the pullback that followed relieved us of $350 per contract. It's very characteristic that while ES recovered from the same pullback, then posted a higher intraday high and closed near the top of the daily session range, ER2 failed to do the same. This is not the very first time something like that happens this year. In fact, this is now a recurring pattern which has caused the system to perform quite poorly in 2007 compared to the previous year when this market had much stronger follow-throughs.
(5/24/07)
Today was another great day to fade this system and had we done so we would have made almost 15 pts. Fortunately, we lost only 3.5 pts, so we are back to the (very slightly) negative territory for the month.
(5/18/07)
Well, as if to prove me wrong, the system added over 3 pts in profits today, so we are back in the positive territory.
(5/17/07)
So after a very rare decent day (not even great, just decent) we have had two losing days and we are now back to the (very slightly) negative territory. It's tiring to see this system act like that, but that's all it has been doing this year in a sharp contrast to the previous one.
(5/10/07)
Finally a decent day and we are in the positive territory for the month with the best trade this year. However, for comparison, by the very same time last year there were 5 trades better than the one recorded today. That's how much things have changed...
(5/9/07)
What to expect on a day like today, that is a Fed day? The answer is: volatility. First we almost got stopped because of it, then surged 6 pts or so only to end up with some quite laughable profit smaller than 0.5 pts. The pattern of weak trends continues and because of that the system is not making money. We are down about 3 pts for the month after two trades.
(4/26/07)
Not a chance... yet another loser and we are now sitting on a loss of 5.5 pts for the month. With two more days of trading left this month we are now even less likely to produce some profit for the month.
(4/25/07)
I was really hoping that today would be the day. Well, it almost was as at some point we were close to 7 pts in profits, but the rally sizzled out later during the day and we ended up with paltry 2 pts. Unfortunately, this kind of pattern has been typical for this market for the past few months and if nothing changes we will not make money with this system. It's hard to blame this on the system as it can make money only when the market trends well and this market used to do this pretty well, but the last few months that has definitely not been the case. To show you how bad it is, let me just note that today ES closed not far from its high of the day, but ER2 only in the middle of its daily range. Also, its range today was considerably smaller (pointwise) than that of ES. You would expect the opposite from the market known in the past for its solid sustainable trends. We are still 2 pts down for the month and chances of flipping to the positive territory are not that high.
(4/24/07)
To say that we are not being lucky this month is a huge understatement. Today, exactly the same thing as the last time happened again. This time the entry was touched, but not penetrated, so I cannot count this as a winning trade, even though, hypothetically it could have been. We are leaving almost 2 pts on the table ...
(4/20/07)
One of those rare, but annoying days, when the market jumps through the entry price before the daily session opens and stays away from it for the rest of the day. Sometimes on a day like that, it is possible to take a trade on the breakout of the first hour range, but this time it was not case, and to add insult to injury, the market returned very, very close to the entry and yet not close enough to get a fill leaving us without 5-6 pts that could have been pocketed under only a bit different circumstances. Well, tough...
(4/9/07)
The first winning trade of the month, very minuscule though. This market is still very congested and unless this changes, this might be another challenging month.
(4/5/07)
Another tough month ahead? I hope not, but so far after two trades, we are down 4 pts for the month. Not so good at all. Today, the market turned against us in the very last hour of trading and instead of making 1-2 pts we lost, even if slightly.
(3/13/07)
Today was one of those days that I do not like very much and it has nothing to do with losing trades, but simply with the fact that the market did not give us a chance to get on board for what turned out to be a very nice and profitable trade. It opened below the entry point and never returned to it during the daily session. In situations like that, it makes sense to enter on the breakout of the first hour range in the direction suggested by the system as I mentioned that in the past on more than one occasion. Had we done so, we would have made a bit over 12 pts today. This is not the first time that something like that happened since I had started to trade the system live. In fact, if you read back through this journal, you will see this mentioned at least twice last year. I estimate that such "non-official" extra trades would have added at least 20 pts last year alone.
(3/6/07)
Where is volatility when you need it? Today we barely eked out 4 pts which is about enough to compensate for a 3.6 pts loss in another trade this month. I was hoping for at least 6-7 pts, but the rally fizzled out towards the end of the session.
(2/13/07)
This market is very congested: out the last four trades (all this month), three had entries within less than half a point off of each other. That shows that this market is very congested indeed, which usually leads to losses. Fortunately, today we made some profit, the first this month, but relatively small: just about 4 points, but that is still much better than the average loss this month which is about 2.5 pts in absolute terms.
(2/6/07)
The second trade of the month has produced the standard loss as the market violated our stop-loss.
(2/5/07)
The first trade of the month has brought a minuscule loss. Nothing too serious though, much less than 1 pt.
(1/31/07)
We are finishing the month on a sour note: the last trade added one more loss setting the total monthly score at -13.6 pts. Well, there are still two more months left in this quarter so hopefully the entire quarter will be positive.
(1/25/07)
Another good day, but with a relatively small profit, just about 2 pts. Every tick counts though...
(1/23/07)
Another winning trade this month with a larger profit than the previous one, but only about 1.5 pts. At some point, the market was up about 6 pts, but it sold off later on. Tough...
(1/22/07)
Finally a winning trade this month, if only minuscule: less than 1 pt in profits. With 5 trades, we are over 13 pts down for the month.
(1/5/07)
Today was one of those days when the market crosses the entry line before the daily session open and never returns to it during the first hour of trading. In cases like that, it makes sense to trade the breakout of the first hour range, as mentioned already on this page a few times. Indeed, had we done so, we would have added over 7 pts to the total score which as of today is negative (-7.1 pts) with two losing trades. These comments concern the ER2 market as the system for ES has been discontinued and I am not going to talk about this market here anymore.