isa's short term trading journal

[isatrader]

Hoil.l

HOIL.L has been trading well since the intraday pullback a few days ago when I closed my short term trade and is throwing up some medium term signals now. It had another spike today towards the 2ATR level but fell a bit short and then fell back to the 1ATR level where it traded for the rest of the day. It had a P&F Ascending Triple Top Breakout today which gives the previous double top breakout some confirmation and had excellent relative strength compared to the market and it's sector. On the weekly chart the volume on force index has broken through the moving average so another good sign. I'm going to watch how it trades tomorrow with the general market being so weak and if it can hold the 300 level I think I'll go long near the close.

Attached is the charts

 

[SlipperyC]

NEW TRADE;

LONG DAX, £2/pt, 6978. Stop: 6970, Target: 7050

 

[isatrader]

US SP 500 Long Entry – Jun 11 Spread

Trade

US SP 500 Jun 11 Spread
Direction: Long

Entry Price: 1287.80
Spread: 0.80

Stop: 1274.40
Target: 1325.00

Account Risk: 0.16%
Potential Account Profit: 0.45%
Risk Ratio: 2.78

ATR (200 Day): 15.04 (1.17%)
ATR (52 Week): 37.78 (2.93%)

ATR Targets
1x ATR: 1302.84
1.5x ATR: 1310.36
2x ATR: 1317.88
2.5x ATR: 1325.40

Attached is my entry chart

 

[SlipperyC]

Hope you went small or got a guaranteed stop on your trade isa.

I put a g/s on my DAX long just in case of any more disasters over the weekend!

We seem to be moving into a climate of extreme volatility, either naturally or artificially induced.

 

[isatrader]

I traded small, only a 0.16% account risk, but I think it's a short term pivot point personally, so I'm bullish for the start of next week, but I think a pullback to the 1295 area would be healthy. My S&P 500 position made a good 0.88% ATR Adjusted gain on Friday so I was pleased with that.

 

[isatrader]

Account Update

I had a surprisingly good week this week with my active trades. My swing trades in Heritage Oil and Britvic both did well and I closed them in my target zone. My breakout trade on GKN trade fared less well and was dragged down with the broader market turmoil. I however started to get more bullish on Thursday as I thought it was all getting a bit over done about the supposed Saudi day of rage. It seemed like that's what the market was focusing on so my plan was to go long on Friday if it failed to materalise, as the market had fallen to to key support at the 50 day EMA. So the Japan quake happened early on Friday and there was blanket news coverage of it, so the Saudi day of rage was glossed over as not a lot was happening with it. So I decided to long at lunchtime as the fear that had caused the decline wasn't there anymore so I thought it would be prudent to get in my S&P 500 trade before the US opened. I only opened a small position risking 0.16%, but I plan to add to the position to get up to my full 0.5% trade size on the first pullback if it looks like it is going higher still. i.e that it's just a pullback and not another leg down.

Performance

Closed Positions
Heritage Oil Rolling Spread: 8.53% (Account P/L: 0.29%)
Britvic Rolling Spread: 3.53% (Account P/L: 0.16%)

Open positions
GKN Plc Rolling Spread: -5.58% (Account P/L: -0.29%)
US SP 500 Jun 11 Spread: 1.03% (Account P/L: 0.16%)

Relative performance against the indexes was good this week. I outperfrmed both the S&P 500 and the FTSE 100 which both made loses whereas I made a small gain. If you look at the relative performance charts you'll see that I'm almost back even with the FTSE since October but there's still a bit of ground to make up vs the S&P 500.

My SB Account
Week: 0.28%
YTD: -0.77%

S&P 500
Week: -1.28%
YTD: 3.71%

FTSE 100
Week: -2.70%
YTD: -1.21%

I've got a bullish stance on the S&P 500 this week, but I'm more neutral on the European markets so I'm considering a pairs trade to hedge myself against the volatility by going long the S&P 500 and shorting the FTSE 100 as the FTSE continues to under perform the S&P 500. I'm not sure if I'll do this or not yet as I need to calculate if it's worthwhile or not.

My long term ISA account however didn't fare so well this week, and took a -5.51% hit (-£380), which shows the downside of being more correlated to the stock market than I used to be. Weeks like last week used to be hard to deal with, but I barely look at the long term account more than once a day now days and know that draw downs are part and parcel of investing/trading long term. The goal for me is outperform the market and make a good return.

I was a bit early on my Antofagasta entry as it fell a further 10% last week, but it had a good bounce Friday at support after some capitulation selling last week. So I think we might have put a bottom in on that now. Randgold was the big drag for me last week after some panic selling on rumours sent it sharply lower to 4500 level. I'm still at 20% cash in my ISA so I've got some capacity for a new position, which will most likely be Palladium which I'm watching currently and have an entry target around the 650 level.

Anyway, that's enough for now as I'm going off topic with my longer term stuff. Below are the usual charts and trades spreadsheet for my SB account.

Have a good week

 

[isatrader]

New trade - long gold rolling spread at 1427.7, stop 1398

 

[SlipperyC]

NEW TRADE;

LONG DAX, £2/pt, 6925. Stop: 6915, Target: 7000

[edit] stopped out for -10pts (-£20)

 

[SlipperyC]

NEW TRADE;

LONG DAX, £2/pt, 6881. Stop: 6870, Target: 6925

[edit] stop to 6883 (1.58pm)

 

[isatrader]

New practice trade: BIG Lots (BIG) – Entered at $42.44, stop at $40.90, target $44.64

 

[isatrader]

My gold position hedge didn't work and was stopped out, as was GKN.L and the S&P 500 position. That puts me at -3.45% for the March, which is over my 3% maximum draw down limit that I set. So no more trading is allowed for me this month now that I've gone over my maximum draw down.

 

[tomorton]

Hi isatrader - while confessing I haven't read your thread at all (but I will when I get home), I am puzzled by your rule that stops you trading if you encounter a certain total drawdown in a month, 3%. I have never understood such rules.

I can understand that you might wish to take an afternoon off to go walk in the spring air to clear your head of emotions and distractions. I can understand if you scaled your position sizes downwards as losses came on top of each other. Maybe you even need a couple of days off to do some research, backtesting and enhance the system. But why stop trading on a random event?

 

[isatrader]

Hi isatrader - while confessing I haven't read your thread at all (but I will when I get home), I am puzzled by your rule that stops you trading if you encounter a certain total drawdown in a month, 3%. I have never understood such rules.

I can understand that you might wish to take an afternoon off to go walk in the spring air to clear your head of emotions and distractions. I can understand if you scaled your position sizes downwards as losses came on top of each other. Maybe you even need a couple of days off to do some research, backtesting and enhance the system. But why stop trading on a random event?

It's simply an account protection method to limit any monthly draw downs to a maximum amount for long term preservation of the account. I only use it in my short term trading account. But I've found it helps me to take a break and come back fresh again.

I know I haven't done anything wrong, my method is developing well, it is simply a market panic. But as the market and the sector account for roughly 80% of a stocks price moves, I prefer to take a step back during times like this and spend some time reading and doing more research, until the time looks right again as I prefer to trade mostly on the long side.

The no trading until the next month is quite arbitrary and might mean I miss the chance of making back the draw down quickly. But it helps me to not get carried away.

 

[tomorton]

Thanks isatrader, I'm still on the other side - if you have a consistently profitable trading style just keep trading it. Maybe use smaller positions until the current poor performance corrects itself or you identify an enhancement and correct it yourself. But only trading teaches you better trading.

 

[leonarda]

Thanks isatrader, I'm still on the other side - if you have a consistently profitable trading style just keep trading it. Maybe use smaller positions until the current poor performance corrects itself or you identify an enhancement and correct it yourself. But only trading teaches you better trading.

I would also agree, keep trading it.. however it ain't done me much good lately !!
I have read this strategy of taking a break in some trading books though, taking the time to review recent trades and assess performance...

 

[isatrader]

Thanks isatrader, I'm still on the other side - if you have a consistently profitable trading style just keep trading it. Maybe use smaller positions until the current poor performance corrects itself or you identify an enhancement and correct it yourself. But only trading teaches you better trading.

Thanks tomorton, I appreciate the feedback on it. It probably is a bit strict and most people wouldn't want to do it. But is also a good excuse for a few weeks off.

I would also agree, keep trading it.. however it ain't done me much good lately !!
I have read this strategy of taking a break in some trading books though, taking the time to review recent trades and assess performance...

I think I got it from Elders "Come into my trading room" book. I kind of view like the limit up, limit down rules in futures markets that stop things like sugar from dropping more than a certain % amount in a day.

 

[SlipperyC]

Well done isa. I think it shows good discipline.

One thing which - as you've seen - is a major failing of mine.

Its a work-in-progress though!

 

[isatrader]

thanks, I think I need it as my Gold trade was a major break of my rules. I put it on on a whim, and I didn't do the normal analysis to check risk. It risked 3% in one trade which is 6 times my maximum trade size. So annoyed with myself for the break in discipline as the S&P 500 and GKN positions were only stopped out for a small loss, so I'd have only just been slightly negative for the month.

If only there was some way of limiting your max position size in the spreadbetting program so that when lapses in discipline happen it wouldn't let you put the trade on.

 

[SlipperyC]

new trade

DAX SHORT, £3/pt, 6696. Stop: 6705, Target: 6590

[edit] stop to b/e (11:28)

 

[isatrader]

Account Update

I had a bad week. I was stopped out of my open positions from last week on Tuesday and I made a big mistake of going long Gold late on Monday night as a hedge. The position was too big for my account and as a result cost me -3.22% when it was stopped out. My personal rules are that I stop trading when I go over my monthly maximum which was 3% this month. However, Fridays price action in the market made me very bearish as it looked like the short covering rally on Thursday had lost it's momentum, so I decided to break the rule on this occasion and I put a small short on the S&P 500 just after the close last night that risks a further 0.49%.

Performance

Closed Positions
GKN Plc Rolling Spread: -9.71% (Account P/L: -0.50%)
US SP 500 Jun 11 Spread: -1.04% (Account P/L: -0.17%)
Gold Rolling Spread: -2.08% (Account P/L: -3.22%)

Open positions
US SP 500 Mar 11 Spread: -0.06% (Account P/L: -0.02%)

Relative performance against the indexes wasn't good this week. Both the S&P 500 and the FTSE had terrible weeks, but my bad risk management lead me to do worse.

My SB Account
Week: -3.78%
YTD: -4.52%

S&P 500
Week: -1.92%
YTD: 1.71%

FTSE 100
Week: -1.90%
YTD: -3.08%

So I won't be putting on any new positions this week as I'm over my risk tolerance for the month. Hopefully I'm correct on the S&P 500 and that it will sell down to at least test the recent lows.

I've been thinking a lot about where I'm making mistakes and how to improve and I think a key area where I'm falling down is my position sizing as this is really inconsistent and so even when I make a good trade it doesn't always generate as good a return as some of my other trades that were less good. So I need to be consistent from now on and I think the way to do this is to use my ATR method to determine position size, so I always risk the same amount relative to how much a stock moves determined by it's 200 day ATR.

Below are the usual charts and positions spreadsheet.