Coming close to the end of the quarter I thought it is a good time to review my best and worst performing trades.
$WMB – PB Long (1.0)R
The set-up was a borderline between PB weekly and BO daily. I think it was a valid set-up and the SL placement was reasonable. I got filled right at the top of a false BO, then got lucky of just not being stopped out quickly and see a quick recovery to new highs tightening my SL, but then got smashed by the huge gap through my SL. In the end I was lucky not to suffer a worse result. In any case, I think there was nothing wrong on my side, this is just the usual type of loser that happen once in a while.
$AUDUSD – PB Short (1.0)R
This one hurts… A very valid PB set-up, filled at the bottom, stopped out at the top only with (1.0)R to see it go off immediately to easily ~2R… This trade was actually suggested by my Waverly Advisors subscription. In hindsight I must say that I had probably chosen a slightly wider SL, but that would have been pure luck had it played out better…
$TWI – PB Long (1.0)R
Again at the risk of falling into the trap of hindsight bias, but the first thing that I noticed here is that the prior trend legs started from the bottom of the preceding pullback leg, while I opted for a breakout entry out of the consolidation, fell into the trap only to see my rather tight SL being triggered. Eventually the stock consolidated a little further and then made another move – again from the bottom of the pullback range… I think this is one I have to take on the responsibility and need to improvement.
$ROST – PB Long (0.9)R
This looks like a too tight stop or a too messy set-up, probably both. The momentum of the entry bar seemed very good, the tight consolidation after the failed follow through was ok, but then momentum vanished quickly, I tightened my SL a little bit and got out soon. The trade management was ok, but the set-up was not optimal. Again, this one goes on my list of improvement needs.
$LYB – PB Long (0.9)R
This one look quite attractive when I entered after some sort of failure test, but I got executed way above the high of the day and then saw it bleeding with low volatility right into my SL. I want to keep this review simple, but as I faced 3 close to 1R losses on long entries on stocks I have to notice that my actions seem not to take into account the overall market, which – again in hindsight – seemed to be overextended around this time (13-16 Dec 2016).
$GNTX – PB Long (0.9)R
In contrast to the previous one I had the tailwind from the overall market situation on this one, as SP500 was consolidating when entering here. Set-up seemed ok, stock broke out after tight consolidation and I tightened my SL, but then got hit by the gap open after earnings. Not much more to say except shit happens.
$EFX – PB Short (1.0)R
The entry does not look so compelling on the daily chart, but reasonable attractive on the weekly. In hindsight I think I should have tried to enter a little lower than my actual enty, to avoid being sucked into the trade but such false breakout. In the end I got lucky to have been stopped out the day before a gap up. In summary, too tight entry.
$PPC – PB Short (1.0)R
Not much to say beyond F-U… Good set-up, gap down open and entry short and being stopped out in less than 90min… I cannot see anything wrong, except the result…
$AGN – PB Long (1.0)R
Again, I’d say rather bad luck. Got sucked into false breakout by a few points only. Both entry and exit points seem aggressive but still reasonable.
$CSC- PB Long (0.9)R
In hindsight maybe a little too tight SL, but would not have changed the result. The trend was and is very solid, but maybe there are better set-ups out there with less agressive countertrend “shocks”.
$JPM- PB Long (0.9)R
Just did not work out. The whole market set back, especially financials. Got a terrible execution here as well, and need to look into the concept of getting out if not strong into the close.
$WDC- PB Long (0.9)R
Picture perfect trade… only opposite direction… Nothing I can see wrong with it, except not re-entering, but I had it on my list and simply chose other entries.
$ES- PB Long (1.0)R
The set-up is very reasonable but I have to think deeper about the concept of only holding into a strong close. This would have saved me here.
$GC – PB Short 1.8R
Worked out well. As I could only trade 1 contract I could not partially exit and I think the decision to get out was appropiate although there was a last push. Definitely got the meat of that swing.
$WDC – PB Long 2.0R
Difficult to imagine a trade working out better than this one. The entry could have been another suck into a failed breakout and it’s good to see that there the luck can also be on my side. Very healthy uptrend and as I am writing this, the stock is up on my WL in case we see a washout in the market to enter near the bottom of the now complex PB.
$TF – PB Long 1.6R
Very quick and clean move. This was a Waverly Advisors trade, simply followed it.
$RCL – PB 1.8R
Good example of not tightening the SL too fast. Again, took a few days to lift off and patience paid off. I liked the trade management, as I took disciplined 1st PT and then waited with tight SL.
$KATE – Anti 2.3R
Another one that could have gotten the other way to remind me how close winners and losers are most of the times.
$CGNX – PB Long 1.5R
Borderline PB and BO. I exited all at the 1st PT as this seemed to be quite overextened especially on the HTF and the candle showed a long shadow.
$SIG – PB Short 1.5R
That was a weird one. Entry was perfect, again a Waverly Advisors suggestion. On the first day after exit I was going to take profits at 1.5R but mixed up buy with sell and all of a sudden had more exposure than I wanted. Now my trading plan states to correct such errors immediately but as the stock fell like a stone, instead of buying immediately I simply trailed it with a stop and never got executed. I kept the SL tight over the range and finally got executed the day of the earnings announcement. So there were a few things that did not work as planned, I could have entered immediately and I could have reduced my position before the day of earnings, but I think it was worth the risk. There seemed to be way more downside potential and the worst case scenario for me would have been an overnight gap likely resulting in something close to a flat trade. I really think my decision was driven by being aggressive rather than being greedy.
$PNRA- PB Short 1.7R
This one went against the sharp market correction. Used a wider SL as this was hybrid BO-like set-up with likely sharp volatility increase. Took all profits after having moved my PT further up as it seemed overextended. Now let’s be clear, this is not aligned with my business plan! Either I change my plan or I change my action. I have absolutely no problem with seeing this to rocket to 300+ as long as full profit taking is part of my BP, but cannot do this if my plan says otherwise.
I am planning to rewrite my BP the upcoming week and currently considering to take out more levels of discretion taking this close to an automatic approach at least for certain set-ups.
I am reviewing my trades once a month from a qualitative perspective. Now I believe it does not make sense to review them all in the last detail, as there will be simply a lot of noise and randomness, so I thought about picking only the ones that really require some attention – I guess this will mostly be the bad examples, but so shall it be. I do not pretend to beat me up but simply find a few bad habits and hopefully improve by bringing them to the light. So here is goes…
In hindsight I think this is a very poor set-up, but that is not the main problem. My entry seems to me much worse setting it even above the high of the previous close. An entry somewhere below the set-up leg low would have been much smarter waiting for confirmation of the downtrend. The best I did was tightening my stop a few days later and getting out before losing 1R.
This was a losing trade, but I think it was a good set-up and good trade management – not all good decisions will yield positive results, nor all bad decisions yield negative results. It’s a complex consolidation range with momentum to the upside. The following day LVS broke out with a gap but missed to follow through, so I tightened my SL aggressively and got out with only (0.4) R on the big black candle, which then actually set up a nice Anti, that I had on my radar but then missed.
It is quite interesting to go through the trades, and I guess I will have to do this more often. All in all I’d say that there was only one poor set-up and that the management of the trades was ok. There were quite a few examples where I got in or out at the very worst moment, but also quite a few were the luck was on my side and I think that is the way it has to be viewn: good or bad luck. I keep following my plan.
Oh, one last thing as it just happened…
I was holding GNTX into earnings BMO today with price almost at my first profit target and SL at breakeven when it opened with a huge gap lower. I knew it was going to happen and that my SL was going to be triggered, so I simply took the hit expecting it to drop further, but look what that bitch did… I got out at the open…