A Wild Profit Appears

I don’t like to look at paper profits and have those influence me to close a position before the price action tells me to close. You may have noticed in the open trades list that it doesn’t have a P/L column. I don’t track that until a position closes.

I explained on day two that the first few trades print losses before any wins come in, and it makes the strategy look terrible until a large enough sample is built for sampling.

Today my first profit appeared in the closed trades table… and it was a doozy! The position gapped up and I only had an initial trade in it. I dutifully added to the position and adjusted my stops based on the new entry. It stopped out pretty quickly (that can happen if the gap open was too big a move all at once), but the profits on the initial entry were significantly more than the losses on the new entry.

As it happens, the close is … between my entry and my stop. Should I have widened the stops after the gap and given more breathing room? Time will tell, but I probably won’t be watching. I trade the price action as things light up in my watch-list… and I don’t check back on positions that stopped out to see what happened after.

It’s a very statistical approach. I try not to make any major changes without large data samples, and even then I like to understand what’s driving the data so I can be sure that I’m not ‘over-fitting’.

_{image source: pixabay}

Trade Journal

These are actual US equities trades, using a fairly aggressive strategy that I have previously 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 @ 217.89 (Sold @ 212.50)
TROW @ 112.14
NUVA @ 59.41
NTGR @ 27.42
MGA @ 50.66
CHRW @ 86.47
AAPL @ 208.71
CMI @ 174.92
SWKS @ 86.95
NTGR @ 28.41

Today I Shorted

DUK @ 87.44

Today I Closed

EW @ 212.50

Open Trades

As I reviewed the open positions and trades after today’s close, I realized I made a mistake and did not include an entry into CC that was made yesterday. I shorted at 18.61 and am currently showing a small loss.

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 price points 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	71.71
CLVS	11.66	Short	2.80%	7/18/2019	12.11
PEP	130.33	Short	14.34%	7/22/2019	133.03
EWW	42.12	Short	10.95%	7/22/2019	43.29
CC	18.61	Short	2.45%	7/23/2019	20.19
TROW	112.14	Long	8.84%	7/24/2019	109.32
DUK	87.44	Short	10.92%	7/24/2019	89.29
NUVA	59.41	Long	6.64%	7/24/2019	57.35
NTGR	27.42	Long	6.49%	7/24/2019	27.35
MGA	50.66	Long	7.32%	7/24/2019	48.93
AAPL	208.71	Long	9.60%	7/24/2019	203.36
CMI	174.92	Long	9.20%	7/24/2019	169.97
SWKS	86.95	Long	6.86%	7/24/2019	83.85
NTGR	28.41	Long	6.72%	7/24/2019	27.35
CHRW	86.4663	Long	8.52%	7/24/2019	84.00

Total Long 107.08%
Total Short 49.09%

Approximate position sizes are given as a percentage of trading account. Position sizing is based on perceived risk; effective Risk Management is critical to my 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 - and while it could happen, it would still only be a 10% drawdown.

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
PCAR	-1.25%	10.31%	5	7/18/2019	7/23/2019
PCAR	-3.32%	11.45%	0	7/23/2019	7/23/2019
EPR	-2.55%	12.42%	1	7/22/2019	7/23/2019
EW	8.51%	11.75%	2	7/22/2019	7/24/2019
EW	-2.47%	10.02%	0	7/24/2019	7/24/2019

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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