Sunday 2 August 2015

Week 2 in review

To make it short, the week two confirmed that I am on the right path. The quality of the WTA tournaments was not the best, so I executed less trades than last week. I made a profit of approximately 4.5 units (last weeks almost 7) and managed to win 15 trades in a row. This streak is still alive. The strike rate even climbed a bit, and it's over 90% after 43 trades. The yield is stable over 25%.

My long term target is 12% (without compounding at the 2nd stage of the trade, which should have a positive effect --> if not, I will not do it anymore). For this goal I need a hit rate of 80% and a ratio of 0.4 between average profit and average loss. The mentioned ratio is more or less fix thanks the strategy (at least without the impact of the 2nd stage), so I can concentrate on the strike rate.

Obviously it's still too early to celebrate. It's just a good start, nothing more and nothing less. I made this week some small adjustments (about entry levels and staking) which gave me additional confidence.

Tomorrow I will start my new job, so my trading hours will decrease. Instead of the whole day, I can be on the ladders only at evenings (at least we have USA/Canada tour now) and weekends. As a consequence the amount of trades will be smaller. Like I wrote, I will scale up the stakes a first time after 100 trades. Probably this will be the case around the start of the US Open at the end of the month.

I made the following conclusions this week:


  • The liquidity for scaling up (and the courtsiders) will not be an issue with bigger matches and events. At todays final at Hamburg you could trade without any problems with 1000 times bigger stakes than I use at the moment! In average factor 100 is possible for sure.
  • I created a concept for compounding during matches. The big profits are still missing (and overall I lost money in the second stage of the trades), but at least I have now a plan for trading with a green book. I am quite confident that the big profits are just a question of time. In the midterm the biggest greens have to be definitely higher than the biggest reds!
  • Be patient and wait for the right matches. Trading is a marathon and not a 100 meter sprint. 
  • Only trade matches, where you know both players. There are enough opportunities, you don't have to enter a challenger tour matchup.
  • Don't over analyse the trades! This is an input of a blog reader, thanks for that.
  • Don't hesitate too long. Often a great opportunity occurs only once. 

Probably the update interval of the blog will slow down a bit. It's difficult to find the time for writing beside a 100% job, daily routine and trading. I try to keep at least a rhythm of one post per week.

4 comments:

  1. You´re welcome! Also, about the hesitation and the intuitive-based decision talk that we were having in your last post, I suggest you the TraderFeed article from today, which I found in your blog list. Very interesting and well written article on the issue of intuitive vs rational decision that I tried to describe you earlier.

    Good luck with your new job and I hope you continue to update your blog as I´m very curious about the next stages of your evolution!

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    Replies
    1. Thanks for the good wishes!

      Yes, the article is very nice. I found this blog today. It seems a very good one!

      Unfortunately I finished the week with a lost trade. I would say it was a kind of overtrading. Not the best scenario to trade when serve giant Isner is involved on a hard court... It's more like a gamble, but it's a learning. Trust your feeling (intrinsic) and combine it with the mathematical side. Well it's okay to have these kind of trades to improve. Beside the numbers (yield, hit rate) are getting more realistic. Right now the level seems far too high. 12% yield and 80% hit rate would look more realistic. Probably I had good variance so far...

      I will keep the blog for sure. Just I will make less updates. First it's a question of time, second i need "events" for an interesting post. One week is a time frame you probably have enough stuff to talk about. If something exciting happens between, I will make an extra post for sure.

      I don't see a reason to stop bloging before the end of 2016. Then I will know if I made it or not. When you reached your target (to be a successfull trader) a blog loses his fascination. This happened with Sultan and Mark Iverson. And a P+L blog is not that interesting. The entertaining part is the unknown end. Can I succeed or not? If this question is answered, it's very difficult to keep a blog interesting... That's the reason why most of them are coming and going quite quick. Obviously most blogs disappear, because the success is not coming and not because they made it.

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    2. It´s true, the stage you´re in it is the most entertaining one from a blogging point of view. Although, there are some topics that nobody talks in blogs that can be explored, namely live game analysis from a trading perspective.

      Also, I remembered another thing that may help you: keep information about the games you trade like the surface, type of game (top 10 vs top10), type of tournament, etc. When you have enough games under your belt it is good to further decompose your results to know where you perform better or worse. I did this and reached some surprising conclusions as I found that I was not profitable for the whole set of competitions I traded. In my case, there was a clear correlation between my level of knowledge of the competition and my trading results. You may have an idea about where you perform better but the numbers don´t lie!

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    3. Yes, I make notes after every trade. Actually I knew that is not the best scenario going against Isner. He is quite a good front runner thanks his big serve. It was just overtrading, probably because I will not have so much time anymore...

      Yes, you can also blog about your trading style and general topics, but it's more difficult to find interesting topics. I will try my best if reach this stage. It's still a long way to go to have the level of a professional trader. So a lot posts will follow :-)

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