Portfolio Turnover

After stopping out of several positions Friday but not replacing them, I had room in my portfolio to act on several new entries today.

I was asked last week about how I pick which stops to buy. It’s actually pretty basic… I have a watchlist of ~350 securities (mostly the highest volume stocks and ETFs in US Markets) and I trade based on price action - breakouts above 20-day high or breakdowns below 20-day low. There are usually many more signals than I have the buying power for, so which I actually follow is almost completely arbitrary. There is obviously quite a lot of room for improvement here.

_{image source: pixabay}

Trade Journal

These are actual trades, using a fairly aggressive strategy that I briefly mentioned in What is your Trading Style?

I have many more 'paper' entries, but these are the few that happened in an actual trading account. I will talk more about the actual parameters of my strategy as time goes on.

Today I Bought

EW @ 195.84

Today I Shorted

PEP @ 130.33
EPR @ 73.08
EWW @ 42.12
CC @ 18.61

Today I Closed

I did not stop out of any open positions today.

Open Trades

While everything else about an open trade is established at entry, the ‘stop loss’ order will be periodically adjusted over the life of a trade. The idea is to move the stops at key intervals and let the profitable trades keep running.

Several stops were moved today as the positions began to hit milestones in my favor.

Ticker	Entry	Direction	Size*	Date	Stop Target
WPM	25.5141	Long	8.43%	7/17/2019	26.30
CLVS	12.45	Short	2.75%	7/17/2019	12.11
GWPH	161.88	Short	4.88%	7/17/2019	169.89
WPM	25.99	Long	8.32%	7/18/2019	26.30
BAX	82.94	Long	14.10%	7/18/2019	81.16
ALNY	75.44	Long	6.04%	7/18/2019	71.42
PCAR	68.75	Short	10.31%	7/18/2019	70.75
CLVS	11.66	Short	2.80%	7/18/2019	12.11
EW	195.84	Long	11.75%	7/22/2019	190.51
PEP	130.33	Short	14.34%	7/22/2019	133.03
EPR	73.08	Short	12.42%	7/22/2019	74.92
EWW	42.12	Short	10.95%	7/22/2019	43.29

Total Long 48.64%
Total Short 58.45%

Positions sizes are approximate, and given as a percentage of trading account. Position sizing is based on perceived risk, with effective Risk Management as critical to strategy. Use of leverage is intended, so % of portfolio will sometimes exceed 100%

Closed Trades

The strategy closes out losing trades quickly, but winning trades run as far as they are able. That's painful at the beginning: the first few trades print losses before any wins come in, and it makes the strategy look terrible until enough trades are closed. With losses limited to < 0.50% of capital on each trade, I would need 20 consecutive losses to face a 10% account drawdown! That's incredibly unlikely.

Ticker	Gain/Loss	Size	Days Held	Opened	Closed
CSX	-2.72%	10.52%	0	7/17/2019	7/17/2019
EBAY	-2.54%	11.97%	0	7/18/2019	7/18/2019
ADM	-2.52%	12.69%	1	7/18/2019	7/19/2019
CSX	-3.90%	8.36%	1	7/18/2019	7/19/2019
THRM	-5.28%	7.68%	1	7/18/2019	7/19/2019

Gain/Loss given as percentage on notional value of trade, with size a percentage of trading account. G/L x Size = % change of account value based on trade outcome. Days Held shows as 0 when a position was opened and closed in the same day (day trade).
Evaluating all position outcomes from Closed Trades, over a large enough sample, could support an approximate calculation of total portfolio return. Actual results may vary.
This is my trading journal. Results are published for entertainment purposes. This is not financial advice. This is not legal advice. This is not even advice.

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