Test: Trading System A on Indonesia Stocks (4)

Some updates as of today (Sunday, 9 February 2014).

#1. My watchlist is still unchanged. The nine counters are ACES, ASRI, BSDE, MAIN, ROTI, PWON, PTPP, SMRA, WIKA.

#2. Capital is also unchanged.

#3. At the end of day of 3 Feb 2014, there was a sell signal for MAIN. Bought this at 3,435, and I need to follow my system so sold it at 3,220 on 5 Feb 2014. Please note that my strategy is to sell on the second day after sell signal appears (i.e. signal on 3 Feb, sell it on 5 Feb)

#4. The sale of all my MAIN shares means I am left with SMRA in my basket.

Test: Trading System A on Indonesia Stocks (3)

Some updates as of today (Monday 13 Jan 2014).

#1. My watchlist is still unchanged. There are nine stocks with good fundamental base.

#2. I have added IDR 6,000,000 to my capital, and hence now it is IDR 44 millions.

#3. On 9 Jan 2014, there was the first buy signal of the year! MAIN.JK gave a buy signal. The following day, managed to get the price at the open (order was put on the night before). On position sizing, the allowable number of shares I can buy is (44000000*1)/(10*3425)= 1284 shares. Indonesia stock market has a new regulation now where the lot size has changed to 100 from 500. So I bought 12 lots at IDR 3425.



#5. On 10 Jan 2014, there was the second buy signal of the year! SMRA.JK gave a buy signal. Today, I managed to get the price at the open too (order put over the weekend). On position sizing, the allowable number of shares I can buy is (44000000*1)/(10*900)= 4888 shares = 48 lots. So I bought 48 lots at IDR 900.



#6. The following is the spreadsheet to track.

Wish me luck! :)

Test: Trading System A on Indonesia Stocks (2)

Today, I did the usual. After work, I downloaded the EOD for Indonesia market, and check my watchlist. So, as one of my criteria is ratings from analysts, the watchlist may change quite often. And today it changed! One stock is out and a new stock is added in. So what I do is just to change my watchlist in my Amibroker and Android app accordingly.

I run the EOD, and still no buy signal. Patience is golden :)

Test: Trading System A on Indonesia Stocks (1)

Hey hey..

I love doing test! This article will be the first of many test-related article you will see in this blog. What I am going to do is to test my trading system (or you can call it business plan) and see if the system will give positive return in the long term. I have experimented many system and this one will be experimented publicly! :)

With this, I am also testing myself (all of you are the judges) if I can follow strictly my rules and system. Please note that the disclaimer page is here and my trading system may work for me but may not for you. Also, I have evolved into a type of trader I am now, and pardon me if you are of different type and find this system does not suit you. :)

Let's start!

Trading System A (yes, you will see I am testing other systems)

#1. MISSION

I created this system so that I will have a POSITIVE return over long period of time (this test will be one year long!). Losing trades is part and parcel of this business, what matters the most is to have a positive return in the end. Note that I categorize this system as a trend following system and hence you will not see many trades in one year.

#2. GOALS

To trade right, strictly following my system and to minimize mistakes.

#3. RULES

My rules are here.

#4. METHOD

Step 1 - Choose the market you would like to trade - Indonesia stocks

Step 2 - Choose a bucket of stocks you would like to watch - I am using online stock screener with fundamental analysis, which mostly include strictly good earning and sales growth. The following are the stocks screened as of today (1 Dec 2013). I will check this everyday as the watchlist can change whenever the criteria changes.

Step 3 - Add the watchlist in your trading software. I am using Amibroker.

Step 4 - Create a program/algorithm that will give me a buy and sell signal. To craft this algorithm, I spent hours/days/weeks to find out what combination of indicators that suits me. This system is for trend following and not very suitable to sideways markets. I have backtested it and give positive return if the signals are religiously followed and no slippage when you put order.


Step 5 -  Everyday, I will download EOD (free) for the Indonesia market (contact me if you want to find out where to get). Upload the EOD to your software (Amibroker) and monitor daily (at most 15 minutes daily) if there are signals for all the stocks in your watchlist. Yup, I am only monitoring my watchlist, ignore the rest.

Step 6 - When signals BUY is given, quickly put an MARKET order, so you won't missed the boat. This is trend following system, so getting the order transacted is more important that what price you are getting. When signals SELL given, I will sell it 2 days after the signal is given.

Step 7 - Exit when there is a SELL signal or cutting loss at 10% drop from buying price

#5. MONEY

My capital allocated for this test is IDR 38,000,000. The size of lots I am buying will follow my position sizing system.

#6. MIND

Psychology/Emotion is not really playing important part here as I am following buy/sell signal. But if you want to know how I manage my trading psychology, you can find my articles on Psychology Trading.

#7. TRADING ROUTINES

Explained in the METHOD part. You can make use of your android smartphone to monitor your watchlist too.

#8. MISTAKES

Not yet committed :)

Wait for further update..