I Stopped all trading activity on September 18th due to business and a holiday. Poor time to stop given the volatility in the markets currently, priorities are priorities.
I combined my fake and real trading results to give a better overview of the possibilities for the last month only. So some days were real and some days were fake. I have validated my fake trading methods to ensure that they would be reasonably accurate by applying the same entry exit pricing as I would normally get for a market order entry. I feel pretty confident that the results are indicative of what I might expect to see under similaar conditions.
So, over 11 trading days I saw a 1.66% daily average return on portfolio.
That is an 18.23% return overall.
Even the fake trades count the commissions so the numbers are net and beat my monthly target by 2.23% while only trading 11 of 16 days (1% per day, 4 days per week, 4 weeks per month)
I ran some checks on Wednesday and Thursday this week and I could have conservatively seen a 16.5% increase for those two days. Another month's worth and change.
I could get used to those kinds of returns, but I still only expect a real 1% return per day to keep me grounded in reality.
So my conclusions have me ahead of my goals. I will start back up with no fake trading next week and plan on sticking with 100 share trades for a bit.
I was lucky enough that the price of AEM is, or was yesterday, down around $50. It was starting to get pricey enough for me to change my position size to smaller to stay in the game with that stock. I will not change stocks mid stream right now as I would have to get familiar with a whole new one...not my idea of a good time in a volatile period of uncertainty as this.
So. October is the true trial by fire as I stick with my plan.
I ran the projections on my spreadsheets and they look really promising. I will get into that another day.
JD.
Questrade, My direct access discount broker.
Friday, October 3, 2008
Wednesday, September 10, 2008
Time and sales shenanigans.
I like to learn...good thing or I might get ticked. $6 lesson, cheap one as I applied my rules this time.
I was watching the T&S and noticed a lot of trades hitting the ask price but those were never appearing in the quotes... i suspect market orders or those out of sight transactions but there were a lot of them. Looked like buyer(s) wanting in at all costs and here I am sitting on a short watching these orders going through and the price is not really moving. Decided it wasn't good as there were 4800 and 5000 share orders going through fast...well in the green and this stock usually has 100-500 share orders. I held from a 20 cent profit as I figured these HAVE to dry up soon as the asks were pretty thick. They never dried up so I bailed. I set my warning stop, trickled past it to hit my hard stop. At least I beat the price jump, which did eventually happen. Just the pullback was not very much which was why I held it. Could have taken a profit but I wanted to try waiting out the flurry as this was at the high for the day. I bet it drops now but I cannot hang around to watch or trade.
Normally I don't see much over 2500 per minute, this week has been hectic...especially I suppose after the meltdown. Everyone scurrying about trying to figure out what to do next. 20K in the opening minute I think when that usually takes 3 minutes to get to.
I haven't setup level 2 quotes yet, just general market depth so I couldn't tell who was buying...I bet had I known I would have jumped at the very first large transaction expecting more.
I was watching the T&S and noticed a lot of trades hitting the ask price but those were never appearing in the quotes... i suspect market orders or those out of sight transactions but there were a lot of them. Looked like buyer(s) wanting in at all costs and here I am sitting on a short watching these orders going through and the price is not really moving. Decided it wasn't good as there were 4800 and 5000 share orders going through fast...well in the green and this stock usually has 100-500 share orders. I held from a 20 cent profit as I figured these HAVE to dry up soon as the asks were pretty thick. They never dried up so I bailed. I set my warning stop, trickled past it to hit my hard stop. At least I beat the price jump, which did eventually happen. Just the pullback was not very much which was why I held it. Could have taken a profit but I wanted to try waiting out the flurry as this was at the high for the day. I bet it drops now but I cannot hang around to watch or trade.
Normally I don't see much over 2500 per minute, this week has been hectic...especially I suppose after the meltdown. Everyone scurrying about trying to figure out what to do next. 20K in the opening minute I think when that usually takes 3 minutes to get to.
I haven't setup level 2 quotes yet, just general market depth so I couldn't tell who was buying...I bet had I known I would have jumped at the very first large transaction expecting more.
Tuesday, September 9, 2008
Larger postion notes.
Currently I am trading 100 share lots. I plan on bumping that to 200 after another week if I can see some consistant gain days.
I am currently sitting at just above 2% after suffering a pair of losing days due to screwing with my method...I should know better. Having said that I have a spread sheet that shows me where I would be if the only difference in my trading was larger position sizes of 200, 300 and 400 shares. I think that my order fills might be affected by the larger positions but I will ignore that factor as I believe it to be pennies per trade, if that.
Part of the difference is the fact that commissions are only paid once per trade so this adds to the return as they are 0.25% per trade. The other factor is, of course, the more shares the more money made per penny move.
Basically I am under capitalized which severely restricts my trading activity but also keeps me out of serious trouble should my theories not work out. So if I can make a go with $4K then once my portfolio grows, how ever slowly, I should see better results in future.
Of course the other factor could be that I only trade two hours a day. Had I the luxury of chosing to trade all day I would try to find a stock that moves well in the afternoon, if such a stock exists, and work it later in the day.
JD.
I am currently sitting at just above 2% after suffering a pair of losing days due to screwing with my method...I should know better. Having said that I have a spread sheet that shows me where I would be if the only difference in my trading was larger position sizes of 200, 300 and 400 shares. I think that my order fills might be affected by the larger positions but I will ignore that factor as I believe it to be pennies per trade, if that.
position current net gain return Goal
100 $98 2.45% 5%
200 $336 4.00% 10%
300 $574 14.35% 15%
400 $812 20.30% 20%
Part of the difference is the fact that commissions are only paid once per trade so this adds to the return as they are 0.25% per trade. The other factor is, of course, the more shares the more money made per penny move.
Basically I am under capitalized which severely restricts my trading activity but also keeps me out of serious trouble should my theories not work out. So if I can make a go with $4K then once my portfolio grows, how ever slowly, I should see better results in future.
Of course the other factor could be that I only trade two hours a day. Had I the luxury of chosing to trade all day I would try to find a stock that moves well in the afternoon, if such a stock exists, and work it later in the day.
JD.
Getting out early.
I did get out earlier on trades that felt like they were turning today. I use indicators like a related index (not delayed), volume, T&S, market depth but mainly the price movement.
Without getting technical, once the price "slowed down", and even slightly before, I could "feel" the strength of the move fading by what my indicators were doing. I am good at calling the exits based on this, I still need to work on my entries a bit though. I need to employ this exit method to "feel" the entries, which I tried a bit today. It got me my fourth trade in the money as I entered at the top of the first large downmove (minute chart). It felt like it was ready to head down and that is the first move that I typically miss.
A side note about getting out early. Two of my trades I could have held through for some more gains and one I could have held through a paper loss for gains as well, one was about 30cents more...the other I cannot recall. In either case I would have given up a profitable position for a possibly more profitable position...the problem with "possibly" is that I would have to rely on probability. I would rather take what I know and what I expect and if the price follows what I might expect then I will hold it. I don't give my expectations much leeway. The trouble is that as soon as the price is let go past the mental stop there are no rules governing when to get out...in cases where this may be a possibility I will place a warning stop and a bail stop. Once I hit the warning I watch the indicators very closely... specifically the T&S and depth...this tells me whether holding past my warning may be a good idea or not. For example lots of supply on a short at my warning stop is worth holding unless the asks stack up then get demolished and the price fails to go lower...I don't wait for my bail price then as it is likely to jump past it anyway with thin depth behind the inside asks, get out while they are still selling at my price.
Without getting technical, once the price "slowed down", and even slightly before, I could "feel" the strength of the move fading by what my indicators were doing. I am good at calling the exits based on this, I still need to work on my entries a bit though. I need to employ this exit method to "feel" the entries, which I tried a bit today. It got me my fourth trade in the money as I entered at the top of the first large downmove (minute chart). It felt like it was ready to head down and that is the first move that I typically miss.
A side note about getting out early. Two of my trades I could have held through for some more gains and one I could have held through a paper loss for gains as well, one was about 30cents more...the other I cannot recall. In either case I would have given up a profitable position for a possibly more profitable position...the problem with "possibly" is that I would have to rely on probability. I would rather take what I know and what I expect and if the price follows what I might expect then I will hold it. I don't give my expectations much leeway. The trouble is that as soon as the price is let go past the mental stop there are no rules governing when to get out...in cases where this may be a possibility I will place a warning stop and a bail stop. Once I hit the warning I watch the indicators very closely... specifically the T&S and depth...this tells me whether holding past my warning may be a good idea or not. For example lots of supply on a short at my warning stop is worth holding unless the asks stack up then get demolished and the price fails to go lower...I don't wait for my bail price then as it is likely to jump past it anyway with thin depth behind the inside asks, get out while they are still selling at my price.
Tuesday...back to basics.
That feels much better to be placing market orders.
I was right. Last week the price action was a little slower so my limits worked for me. This week the price is moving faster so markets are working better.
5 trades today, 3 winners, two losers but still up 1.63% for the day. Oh, right commissions...make that 0.38%. That's what sucks about 100 share trades with only small moves captured. Lot of work for a small gain...still in the learning curve though so I won't complain. More on position size in another post.
I won't go on about the winners as my entry was right and my exits were bang on...for me and my tolerance and the price action today. There isn't much more to say about those other than I would have liked to have a really big runner...not today after yesterdays' run though.
Second trade, short for a small loss. Looked like a consolidation triangle setup with a likely continuation down, called it wrong but got out well...8 seconds after exiting I reversed my trade long which was the right call, just not convincced so I bailed then waited for the break and jumped in long again. This time it stuck but was not a large move. Perhaps I should wait for the breaks or follow my pause before re-entering a trade rule...at least more than 8 seconds.
I did not make back my last week losses which is enough reason NOT to continue trading today. I think I will hold with an up day and bide my time for a stronger moving day. I was going to check the afternoon activity to see if anything looked really promising...it doesn't usually though as the timing doesn't work out for me....as it didn't today either.
I didn't take the time to update my stats but they are down from last week. I might have tried to work one more trade had I done the math with the commissions today, just as well as trading to try to make up for a loss is not in my rule book...wrong mindset.
JD.
I was right. Last week the price action was a little slower so my limits worked for me. This week the price is moving faster so markets are working better.
5 trades today, 3 winners, two losers but still up 1.63% for the day. Oh, right commissions...make that 0.38%. That's what sucks about 100 share trades with only small moves captured. Lot of work for a small gain...still in the learning curve though so I won't complain. More on position size in another post.
I won't go on about the winners as my entry was right and my exits were bang on...for me and my tolerance and the price action today. There isn't much more to say about those other than I would have liked to have a really big runner...not today after yesterdays' run though.
Second trade, short for a small loss. Looked like a consolidation triangle setup with a likely continuation down, called it wrong but got out well...8 seconds after exiting I reversed my trade long which was the right call, just not convincced so I bailed then waited for the break and jumped in long again. This time it stuck but was not a large move. Perhaps I should wait for the breaks or follow my pause before re-entering a trade rule...at least more than 8 seconds.
I did not make back my last week losses which is enough reason NOT to continue trading today. I think I will hold with an up day and bide my time for a stronger moving day. I was going to check the afternoon activity to see if anything looked really promising...it doesn't usually though as the timing doesn't work out for me....as it didn't today either.
I didn't take the time to update my stats but they are down from last week. I might have tried to work one more trade had I done the math with the commissions today, just as well as trading to try to make up for a loss is not in my rule book...wrong mindset.
JD.
Monday, September 8, 2008
Monday trading fiasco
Well, another down day. I can blame all sorts of outside factors, mainly interruptions or distractions that resulted in loss of focus, and I would be correct but there is one underlying factor that is the crux of my current loss.
I haven't bothered to run the numbers but it would be in the $60 net range. I have set a $50 loss limit per day, before commissions. Once I hit that I am not to trade any more as I would consider that I have "lost it" for the day...I didn't expect to hit that in two trades and I didn't actually expect those to be my first two trades of the day. I chose to bail early, even though I thought there was a good move left, I just was in the wrong frame of mind...perhaps I should have faked it just for the learning curve.
I started out the day seeing a good gap up from Friday's close. Given the recent activity this would lead me to favour short trades today, so that is what I did. My 20 minute rule had me sit out too much of the first move ($1 of it) to feel comfortable getting in...so I waited until what looked like a good setup to develop for the downside after a brief rally or consolidation at a support/resistance level.
1024h and it looked OK. Price had dipped nicely below the primary PP for the day and I might have expected it to continue to head down. I planned for a tight mental stop as I was not sure that it would head back down convincingly. I held through a small profit to only have it turn up and I got out at a small loss. Depending on how you look at it, in too soon, out too late. Although had I been in sooner I would have captured a bit more of the last drop to the low and might have been more satisfied to close early.
I tried again at 1103h and had the same thing happen, except worse. larger loss even after calling the target, hitting the target and bouncing off the target. I held on too long.
Problems:
The limit order is taking to much thinking and time to execute well.
Me not listening to my intuition. Get in when I think get in. Get out when I think get out.
A little greed making me hold on
A little fear keeping me from getting in earlier
I must admit that had I placed the third trade I would have been on the leading edge of the last large move down for the day. Even if I had waited for full PP break confirmation there was still $1 left in the move.
I checked in before lunch and saw the activity and at least knew enough to not try to trade beyond that point. The trading range for the rest of the day is likely to be within a dollar with lots of small moves, not worth the hassle.
All in all a good learning day even if I close it on a loss.
JD.
I haven't bothered to run the numbers but it would be in the $60 net range. I have set a $50 loss limit per day, before commissions. Once I hit that I am not to trade any more as I would consider that I have "lost it" for the day...I didn't expect to hit that in two trades and I didn't actually expect those to be my first two trades of the day. I chose to bail early, even though I thought there was a good move left, I just was in the wrong frame of mind...perhaps I should have faked it just for the learning curve.
I started out the day seeing a good gap up from Friday's close. Given the recent activity this would lead me to favour short trades today, so that is what I did. My 20 minute rule had me sit out too much of the first move ($1 of it) to feel comfortable getting in...so I waited until what looked like a good setup to develop for the downside after a brief rally or consolidation at a support/resistance level.
1024h and it looked OK. Price had dipped nicely below the primary PP for the day and I might have expected it to continue to head down. I planned for a tight mental stop as I was not sure that it would head back down convincingly. I held through a small profit to only have it turn up and I got out at a small loss. Depending on how you look at it, in too soon, out too late. Although had I been in sooner I would have captured a bit more of the last drop to the low and might have been more satisfied to close early.
I tried again at 1103h and had the same thing happen, except worse. larger loss even after calling the target, hitting the target and bouncing off the target. I held on too long.
Problems:
The limit order is taking to much thinking and time to execute well.
Me not listening to my intuition. Get in when I think get in. Get out when I think get out.
A little greed making me hold on
A little fear keeping me from getting in earlier
I must admit that had I placed the third trade I would have been on the leading edge of the last large move down for the day. Even if I had waited for full PP break confirmation there was still $1 left in the move.
I checked in before lunch and saw the activity and at least knew enough to not try to trade beyond that point. The trading range for the rest of the day is likely to be within a dollar with lots of small moves, not worth the hassle.
All in all a good learning day even if I close it on a loss.
JD.
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