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My fellow Canadian investor Underexposed and I were having a bit of a discussion over on his trading journal. Check it out it’s a great journal. He basically calls his trades in advance, one of the very few who will do this.
It seems I wore out my welcome over there and I wanted to set the record straight on a couple of things.
You should never assume anything. That’s why I ask questions I don’t want to assume. But yes these are my real life trades in my trading account. The account is held at Interactive Brokers and I trade mostly US stocks. I also have an investment account that is mostly invested in Canadian dividend stocks. The cash from dividends and distributions is what I live off. The gains from my trading account are used to pick up the tab for my winters in Arizona.
Nope: I limit my losses to $500. My gains are hopefully in the $1500 range.
Underexposed
from April 28 in your journal
Quoting
Picked up some QCOM @ 77.96
Stop @ 77.30 Initial target 80.00
so you would purchase 250 shares as a position because it is a $2 spread
so your investment is 250 X $77.96 = $19,490 to make a potential $500
but you did not make $500....you stopped out at $78.70...or $0.64/share or a total of $0.64 x 250 = $160 but you would have made less than that as your commission costs are not included at $10 in + $10 out your gain is only $140.00
That’s not quite how it works. My position size is calculated from the difference between the entry and the stop. In this case 77.96 – 77.30 = 66 cents.
If I was using $100,000 of capital then 0.5% =$500
The position size would be 500/.066 = 757 shares. I’d round it down to 750.
So my trade is 750 * 77.69 = 58740 to make a potential 1500
And your right. I took the trade off before it got to the target and only made
750 *0.64 = $480 less commissions of $4.00 each way. $472.
The stock wasn’t acting the way I expected it to so I got out.
Underexposed
and this seems to be one of your better gains...there are a fair number of losses that you report and admittedly a few wins.
Frankly I doubt you could make a living at this even if your capital was 10 times this amount...you are basically breaking even from the look at it.
Here is a quick review of my trades in May.
SCI loss 0.05% of Capital.
QCOM gain of 0.68%
SHPG loss 0.51%
NEE loss 0.33%
DRII loss 0.28%
LNG gain 1.37%
CHRW gain0.09%
SWSK loss 0.31%
HON loss 0.45%
MAR gain 1.02%
Realized gain for May was 1.25% of capital.
I can live with that. I’d like to do better but if I can do that each month that’s a 15% annual return.
Any comments or questions? Plese feel free to ask.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Monday I will look at 3 pullback plays;
LNG; IQNT ; CONN.
And 4 break-out plays:
AER; GBX; IQNT; NXPI.
Entry Signal on the pull back plays will be a trade above Fridays high. Stop will be just below the last swing low or Fridays low. Targets will be somewhere above the last swing high. It really depends on the price action.
Entry on the breakout plays is above the resistance. Stops will be tight, usually just below the resistance and exits will be a break of the trend line.
Here is a chart of MU that I bought at the end of May. If it closes below the trend line I will more than likely be out if it trades below the low of that day.
Is anyone out there getting any value from these posts? I feel like I'm taking to myself. I'd really like to interact with others interested in swing trading.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Opened a postion in GBX @ 57.03 Breakout play: I'll exit the position on the break of the trend line.
Right now that would just below the last swing low. $53.50 range.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Did a little bottom fishing today.
Picked up a small position CAG; $28.89
Possibly catching a falling knife. I have a stop just under Fridays low at @ 28.50
Price has stopped falling (For now). I'm looking for a possible gap fill. Initial target is 31.25
The risk is small compared to the possible reward.
Rolling the dice so to speak.
Capital at risk is less than 0.2%
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Closed this trade @ 15.52. Price moved below yesterdays low.
Loss of capital was 0.05%
deaddog
Opened a postion in GBX @ 57.03 Breakout play: I'll exit the position on the break of the trend line.
Right now that would just below the last swing low. $53.50 range.
Looks like GBX will close below the trend line today.
I’ll have to make a decision by the close of market if I’ll take the trade off or leave it for another day. We’ll see how it acts in the last ½ hour. If it makes a new low from here I’ll close the trade.
Sold @ 57.01 a couple minutes before the close.
Capital lost insignificant Break even trade.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Not a very busy Month.
Nothing I sold showed a profit.
DDD and LNG were sold at a loss of 0.49% of capital each
TQNT showed a loss of 0.05% of capital and QCOR; PPC; & GBX were break even trades.
Total loss of capital for the month was 1.03% of capital
Unrealized gains
SUNE: break even
CAG: gain of 0.40% of capital
MU: gain of 1.75% of capital.
Total unrealized gain of 2.15% of capital.
Overall gain for the month = 1.12%
I’m not really happy with 1% per month; I’d prefer 2% or better but any gain is better than having a losing month.
This will be my last post in this thread. There doesn’t seem to be much interest in swing trading stocks. I had hoped to have some discussion with other traders but none has developed.
DD
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard