Saturday, May 1, 2010

Month and trading in review

It is getting hot around here. While I appreciate getting inside to cool off, it is a bit stressful to review my trades, rethink the moves, wish I could grasp for those that got away, and kick myself in the pants. But it also creates an attitude of gratitude as I think of how the exact opposite of the above could have happened. I know lots of people lost their arses this month.

Overall I am very happy with my trading. I feel like I have got initial position sizing and risk management via predetermined prices at which to take losses. I'd like to determine better if my points of taking losses are correct. When price is trending down, there is no way of knowing when it will stop doing so, making it difficult to hold onto losers. But just taking a look back at this post tells me there could be some work to do. If I'd stayed in each of those 4 stocks I'd have a lot more money right now!

I traded a lot, 33 trades give or take. For me a trade is a buy and hold or a buy and sell, so number is more likely double. For ease of detailing it, I am calling R as 0.5% of my trading capital as the amount I would risk on a trade. This month gains in excess of R were: 1.4R, 1.46R, 2R, 4.8R, 5.1R. Losses in excess were 1.39R and 1.85 R. I do not feel real bad about the 2 big losses. One was a gap down after earnings (maybe should of been out of it) and the other I did not have good alerts programmed into my platform. I hated not having a good alert in as it got near my loss point, but the difference in time was just crapped and got flushed that fast! My two biggest gains were a big trade in C on the first day of Greek fears (held 4/16 4.56 until 4/21 4.97) and on PWER bought in two installments (5.4 on 4/22 and 5.57 on 4/26 and sold premarket gap 4/30 at 6.9). PWER could have been held longer but I doubt I would have kept it into the weekend. It was a marvelous gift!

Overall I was up 1.45% for the month and now 4.5% YTD. That is 3 months positive in a row! For the time involved, I could have just worked OT at day job and beat this with the money at risk.

Emotionally it was a roller coaster. My protection from losses during the ride was predetermined loss points based upon an issues volatility. I did not screw up taking losses. I sold some things prematurely not wanting to sit through whatever was happening but once I recognized my WEAKNESS in doing so, I capitalized on others doing the same and had my 2nd best gain of the month.

I want to do better with a daily trade log. It is tough to look back to fully know the reasons for trade entry and exit. I want to be a better predator on entries.

Some of the action of "market leaders" concerns me. I remember such concern when I took a small profit in APPL years ago. I'd bought it at 98, sold at 113 after it came in from 120, it got near 200 by the end of the year.

The option god demon still willing to take my money. One small gain, two small losses, two open positions.

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