Thread by @madan_kumar

#YearENDmusings

As we are coming to the end of the calendar year 2019, wanted to jot down few observations of my trading in 2019 and few experiments i will be doing in 2020 going forward

I have some plans/experiments lined up for 2020 and hence, this thread

(1/n)

A. My positional trading observations --

1. I am a trend follower and made a little over 30%
2. 10th consecutive positive year(started trading Nifty around early 2010). Was trading US markets in 2009 and was +40% year. One decade of +ve returns 😊

(2/n)

3. Drawdown (max DD of the yr) were the least in the last 4 yrs
4. Stopped compounding my positional acct due to size 3 years ago and 2019 was no exception. No change in size
5. Execution efficiency is close to 94% (deviated from plan 3 times)..could not achieve 100% 😊

(3/n)

B. My intraday trading observations ---

1. Made around 334% (high was 375%)
2. More in-depth analysis of returns, drawdowns and their relationships in this thread

https://twitter.com/madan_kumar/status/1201718312696074240

3. It has been 10 mnths and 9 out of10 mnths were +ve (DEC has 2 more days left 😊)

(4/n)

4. Compounding is easy if we follow a well-thought out trade plan with sound money management.
5. Understood the importance of systematic trading more as the account grew intraday. I am not sure if i would have done the same thing following discretionary way of trading

(5/n)

6. Made a significant change in TSL. I know folks who consider intraday trading as a sin...i was one too. But, am convinced that money can be made intraday as well. Changed my TSL exit mechanism a bit (made it aggressive) in intraday and it did wonders to the account

(6/n)

7. So, it pays to test different trailing stops (both conservative and aggressive) and find out whether you’d have made more money using those instead of price targets or your magical “price action” interpretations.

Now, comes the experiment/future plans part...

(7/n)

C. Experiments/future plans for 2020 --

1. Fully automate trading (zero manual intervention) and deploy 3x more funds in positional trading. Might trade more strikes for the same buy/sell signal. Been observing that for a while now

(8/n)

2. Have tried scalping, pair trading, countertrend, directional futures/options buying,etc in the past. (Attached pic is one of the slides in my workshop..pointer might be of help to someone).
3. Directional option selling and HFT are missing from the list

(9/n)

4. Been observing option selling(directional) in both intraday/positional for a while. Will start experimenting it in Intraday from 15L (Acct is at 13L right now..once it reaches 15L, will move to option selling)..PLAN is all set.
5. Will take 15L to 30L through selling

(10/n)

6. Plan is to keep compounding intraday account the whole year
7. Once automated, will start trading more instruments intraday like BNF (on multiple strike prices) and USDINR futures (options volume of USDINR is very limited)

Few pointers that might be helpful to some --

(11/n)

#MwmNuggets

1. Try increasing the execution efficiency above 90-95%. Results would be dramatic. A simple comparison of how many pts u would have made had u taken all the trades without any errors vs ur current pts will be a big eye-opener

(12/n)

2. Trading the mkts successfully is a difficult skillset to acquire and it might take few years to achieve.

3. Once you do it, i can guarantee that no other profession can even come close to it. . It will allow your money to compound more than you ever imagined

(13/n)

4. Many ask how to focus on the process. Very simple.

Kindly focus on the next 100/500 trades and once we understand trading is all about mathematical edge (and law of large numbers), we can easily shift our focus from outcome of one/few trades to the 'process'

(14/n)

5. Know your long term trading stats and keep executing the trades. Lose the thought about the previous trade and dont fret about future trades. We focus only on the current trade. In yogi terms, 'LIVE in the MOMENT' 😀

Good luck all for a great 2020 ahead !!

(15/15)