In stock futures, you can exit only one or two lots at your desired price. Better split your capital into multiple stocks to avoid slippage and reduce impact cost.
Today is actually the very first day I have started betting on what I have reason to believe is my holy grail. So avoiding details. Let the data accumulate for at least 200 trades.
But don’t mind sharing the route I took to arrive at it. The process should have the following features:
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All data you consider must be accurate and authentic.
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You must have your own insights about the data, and those insights must be unique and original.
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About your insight, ask the following four questions:
– is it unusual? [unusual, lesser known set up is unlikely to be targeted by a rival algorithm)
– is it happening fairly often? (You don’t want 60 trades an hour, but you also don’t want to sit without action for days together. Very few have the patience of a sniper in hiding)
– is it reasonably consistent in its consequences? Like, if event A happens, event B (on which you bet) must have a very high probability of happening as a consequence.
– is it profitable? The reward-to-risk ratio must be more than 3 times [(1/p) – 1], where p is the probability of event B happening. -
Create your own indicator (write code to identify the set up based on your insight) to track the entry point, stop loss level and optimum exit point.
Note: This post is written by someone who has less than 3 years’ experience in this field, and until now, is a NET loser, but the total loss so far is very small.
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