April continued where March left off, with lots more volatility, and more stocks being closed. In the last 3-4 weeks I gave back most of my paper profits. This has showed that my money management system is not working properly, and I did not protect my capital when things became volatile.
I also realised my trading so far has been mostly trend following, and it worked really well when there was a trend from December to March, but once we hit turbulence, I gave back most of my paper profits....
New rule to be added to the list now. The aim is to protect capital, as well as gains. I am happy with the current stop system, and will leave it as it is. The new rule is to only open new positions when at least 1/2 of all current positions are at/or above break even point. In case I have no open, positions then I will only open up to 3 new positions, and wait for at least 2 of them to become positive before moving on. If my positive positions get closed, and create imbalance in my trades, I will wait for balance to be restored before opening new positions.
Has been a tough month of trading, started off well, but soon most positions were closed, and I gave up most of my profit gains, which has led to some new money management rules.
Total trades 6, win 2/loss 4
Win ratio 33%
Total Win $151.5 Div $ 0, Average win $ 75.75
Total Loss $ 95.4 Average loss $23.85
Comission $96 Funding $14.50
Totals: 151.4 - 95.4 - 96 - 14.5 = - 54.5
Win ratio has been falling, resulting in loss for the month. I think with better money management strategies, this should start improving. Average win has also gone down, I am putting it all down to increased volatility in the past 6 weeks.
From April all new opened trades have been in Interactive Broker, with only 1 trade still open in IGMarkets. So far 3 positions are at or above break even, and 2 are still have stops bellow break even. My rule allows me to enter into 1 more positions. But at the moment, I dont have any reasonable gains on paper, so for now I will wait for at least 1 more stock to go above break-even point, or significant gain on another stock, to give me a larger paper profit.
If all the above trades were done through IB, my total loss would have been - $16 due to lower transactions cost, and no funding costs.
There seems to be a few stocks setting up for moves up, but there a too much volatility still, and I am trying to avoid being whipped around. Will hold on to what I have now, and keep adjusting stops, until I am in a better position.
I am not going into May with any strong positions, but instead i have more rules, and ways to protect/preserve what I have.
The following user says Thank You to 223552 for this post:
Two stock that i bought in the last 1 week were ALL, and TAH due to chronic computer issues cant put up charts.
Today there has been strong moves u, and i now hace 4 stock above break even point, so will be looking to buy another 1-2 stocks in the next few days. Aim is not to rush , and only buy something that makes a lot of sense to me.
The following user says Thank You to 223552 for this post:
I am now getting more comfortabel with IB, and able to get my statements , and work out my monthly records.
Through first 2 weeks of May I was travelling well, and had 4-5 positions that were above breakeven point, i then started adding more positions ( 2 more). But then, the markets ran into trouble, and I got stopped out of most of my positions and gave back all my gains. Feeling pretty miserable about it, I think next step is to make sure I take profits. If a stock reaches its target, I will take 50% off.
ALL broke out of consolidation/retracement, and I went long on 30/4/13 150 @$3.93, got stopped when it closed bellow recent lows around 25/5/13 at $4.07, slight profit of $9
GPT reacehd new highs since about 2008, had a small retracement over a couple of weeks, and started moving up. Went long 200 on 10/5/13 at $4.15, and got stopped out on 22/5/13 at $3.99 loss of $44
LEI this was a small gamble, it was a low risk, low probability trade. I was trying to pick a bottom on stock that had some big drops down to a level that has proven to be support in the past. Level of $18.63 has been a support over the past 6 months, and on 14/5/13 I went long 200 at $18.63, and put a stop at $18.52, the low for the day was $18.51, so I got stopped out same day, the bounce never happened and stock continued lower.
MGR long 400 at $1.7875 on 20/5/13 stopped 22/5/13 at $1.70. It broke above long term s/r of $1.77 a fe days before that, and showed support for this s/r line, but it did not hold, and got stopped out 2 days later.
SPN I initially bought it in early April 500 shares, when it broke above resistance at $1.20, i then trailed the stop, and had another buy signal on 19/5/13 and added another 500 shares to my position. What I was not ready for was a exdividend 2 days later, somehow I missed that and was not ready. I had first stop triggered at $1.23 on 22/5/13, and I closed the other 500 shares on 23/5/13 at $1.195, I collected $41 in dividends
TAH went long end of April 250 shares around $3.30, sold when the stock met resistance at $3.60, and closed bellow recent lows T $3.50 ON 23/5/13
BXB WENT LONG 120 SHARES AT AROUND $8.0 TOWARDS THE END OF aPRIL, GOT STOPPED OUT ON 26/5/13 AT $9.09
Total closed trades 7, Win 3, Loss 4
Win/loss ration 42% Better than past few months
Total Win 158.2, Average Win $52.73
Total Loss $134 Average Loss $33.5
Totals: $158 + $41 - $134 - $78 = -$13
I feels that in May i became a little reckless, and also have been of my game a bit, more distractions, less proper research.
Going into June I decided to reduce my stop loss, get back on my feet a bit more. So far total loss from July 2012 till now is around $850.
New plan for June:
1. Reduce stop loss amount, to overall reduce losses
2. Continue with the same money management plan
3. Back to thorough research, and more detailed explanations for taking each trade
4. Take profits at significant s/r
Was stopped out of my last position on Tuesday, should have really been out of it on Monday, or even Friday last week, I think mentally with the lack of progress in the past 1-2 months, I was not in the right frame of mind, and let my losses run on the last trade. However, looking back at it now the markets were setting up for a correction in the last 1-2 months. By following my rules, and sticking to stops, I did not make any money in the last 2 months, and made 2 small loses. However, I am completely in cash, and sitting now and watching others bleed. I am taking the rest of the week off from trading, rest my mind, and regroup.
Until this week, my bias was long, and most of my trades were long. This week All Ords (aust index) closed bellow 130 moving average, and to me this is a bearish sign. i am also deciding on making a written plan every week on different scenarios that may play out, and trade accordingly. This weekend I will do my usual scan, gather stocks that are setting up for long/short moves. My current bias is bearish now, and the plan will be to go long for a quick profit on a rebound, and when/if things start to reverse enter my short positions.
My big loss was ALL
It was showing resistance at $4.30, so when it closed above it , i went long the following day, it also reversed that day, and closed bellow the lows of the last 2-3 days, i should have exited straight away, but waited another 2 days, and lost further 10cents, costing me a total of around $70 my biggest loss on any stock in a long time... Good sign to stop, regroup, refocus.
Have you ever considered trading weekly charts ? That way you could spend all weekend scanning all markets possible and enter on Mondays, set and forget.
It seems you also favour break outs, that is fine however try and incorporate some swing trading or range trading too. Using limit orders, therefore your risk is much smaller. Consider finding setups in bulls that retrace back to a support area of a MA as an example, use limit order for entry.
On Weekly charts things move a lot slower, less noise and you will catch some massive moves and also trade less which may suit your lifestyle.