Nobody can predict tomorrows stockmarkets. Neither can we. So, we follow the rules of the trading programs.
It only costs 15 minutes a day.
To show what we do in a transparant way, we work together with Collective2. A reliable partner in automatic trading.
Let automation do the work!
We trade with predefined trading strategies. This way of trading filters out the emotion of making trading decisions. We rely on solid strategies with a proven track record.
Money-management, position sizing, discipline and psychology are key elements for longterm trading success. So, that’s our main focus.
We use Trade Navigator to make it possible to look at more graphs then the human eye ever can, and to program our strategies. At the same time we stay old fashioned technical analysts. We program trading ideas and trade them real live on Collective2. We started that idea to find out if there is a difference between the theoretical outcome of the algoritme and a real trading account. And how to deal with it.
The Dutch Volatrader strategy was originally made by Larry Connors. So, all credits go to Larry for his work. The only thing we did was making a smarter entry. We now look at the overall market volatility ($VIX) to determine the level of the limitorder, instead of a fixed % distance. The more volatile the market, the further away our limitorders.
We apply the trading rules of the Dutch Volatrader to all stocks in the Russel 3000 index.
We can be clear about that. We do not use stop-losses.
Let me explain this.
A lot of people think that stops can save them from losing positions. In the real world that’s not the case. What if prices jump over your stoploss level? Or your stop gets hit and the price returns suddenly in your favor. Only without you.
We rather limit our positionsize instead of using hard stops. We trade 10% of our account per position. So, if a position loses 20%, it “only” effects us for 2%.
Stops are hurting the results of short-term swingtrading strategies like Dutch Volatrader. You can see that clearly in the graphs below.
A tradingsystem has to perform well for the market circumstances that it is made for. And at the same time not lose to much money in other type of markets.
Dutch Volatrader performs good in most markets and performs extremely good during market crashes. You see that clearly in the graphs on the right.
Market crashes give us more trading opportunities and greater volatility. Short-term strategies like Dutch Volatrader have an advantage because we are quick in and quick out. The average holding-period is only 8 days.
The knowledge of tradingsystem behavior is always a good thing when it comes to trading. This is why we do so much research.
I hope it will give some confidence.
In the graph on the left
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