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Came into today feeling confident and ready to begin taking larger-than-diagnostic positions.
SHOP set up nice and broke out. Bought 1/2 size position. Stopped later on the mid-morning flush.
Sold 1/2 TDOC (1/20 remaining)
Sold ~1/4 KSS (~3/4 remaining)
The action today was interesting and I'm not sure what to make of it. Volatility definitely increased but on the other hand, the dip was bought and the close was strong. Cautiously bullish... no new positions larger than the 1/10 diagnostic size.
Watchlist for tomorrow is quite short at only seven names.
Stopped TT
Stopped LPRO on trail stop
Stopped ARWR
Sold 1/2 KSS into the morning strength (1/4 remaining)
Bought 1/10 NTAP
Bought 1/10 NVAX
Sold LOW on trail stop
My caution has been increasing the past two weeks and today it paid off coming in under 50% invested. I was very fortunate to sell KSS into strength this morning. Because of this and general outperformance I actually ended the day flat despite the carnage in the indexes.
Added two new diagnostic positions. A few of them are working great such as PLTR and TDOC but many have hit stops suggesting that I still don't have much traction in this environment. I'd be pleasantly surprised by an up day tomorrow.
My diagnostic positions continue to show divergent performance. Majority hitting stops and a select few have broken out strongly and shown extreme relative strength. I still don't feel that this is a time to get aggressive. Found only three setups for today suggesting an extreme shortage of stocks with well-constructed bases. With no stocks breaking out how can the market move higher? Of course Minervini's is just one of many ways to trade. It's entirely possible that other trend-followers are finding many setups for their methodology while I am finding few for mine.
January Closed Stock Trade Stats:
+5.20% Pct Gain
52.63% Win Rate
1.65 W/L (R units)
.35R Expectancy
I've done a good job preserving gains as conditions became less favorable and the indexes moved off of highs.
In a month where the S&P500 and DJIA closed negative, the Nasdaq closed slightly positive, and the Russell closed up ~5% I am quite pleased with my return given that I generated it with an average daily exposure of only 54%. This means that adjusting for exposure I doubled the return of the best performing index, with less portfolio volatility.
Slow, smooth, and steady wins this race. Looking for any bits of outperformance I can pick up against the indexes each month. Buy & hold creates huge wealth over a 40+ year period. Consistently edging ahead of buy & hold generates the same results in a shorter period of time. Amount of outperformance in % is exponentially related to the number of years required to reach the same $ result. Keep on searching for those small edges.
Diagnostic positions have been working great. Portfolio up 1.22% this week while only 18% invested on average ~= 6.77% if fully invested vs. indexes weekly returns ranging between ~3.5%-6.2%. Outperformance suggests traction. My watchlist has been broadening recently although the one concern I have is that any stocks off of highs are weak relative to the indexes over the past weeks timeframe - that includes any and all stocks currently basing. All things considered, if stocks break out tomorrow I will hit new setups with 1/2+ size, up from the 1/10 I've been trading.
Failed to check earnings on ARWR and SNAP! Got lucky on SNAP but not so much on ARWR.
Stopped out ARWR just before it reversed and ripped higher.
Sold 1/20 SNAP at 2R (1/20 remaining)
Bought 1/2 ATUS
Bought 1/2 GH
ATUS
GH
Portfolio getting traction + watchlist broadening = increase position sizing. Neither ATUS nor GH were screamin' setups that I HAD to take hence the 1/2 positions sizes. For next week I'm prepared to go full size on A+ setups and 1/2 size on anything good but less than A+. Haven't completed my weekend scanning yet but it looks like this is going to be the longest actionable watchlist I've had for a Monday yet this year. The theory is that the more stocks set to break out the higher the likelihood of follow through in the event of a total-market breakout.
Bought LAZR, DADA, and SBE - all full size positions as planned.
All closed below the pivot and with negative P/L! Bummer but nothing I can do but wait and see what kind of price action we get tomorrow. The worst case scenario is all three hit the stop and I take a -3% hit on the overall account. Recognition and acceptance of the worst likely outcome (fear-setting) has been a hugely beneficial practice for me in continuing to detach my emotions from money/outcome.
My existing positions worked reasonably well today, returning +1.27% on dollars invested, beating all the indexes except for the ever-so-powerful and squeezelicious Russell 2000.
Overall I'm still feeling pretty good about market conditions and looking to add exposure. Would like to see my three new positions advance before adding more exposure though. In absence of the three new positions advancing I will sell one position in order to finance any new risk in a more promising setup.
Stopped out of LAZR and SBE
Sold remaining SNAP
Bought INFO
Bought AI
Was stopped out of two of my three buys from yesterday and the one that has not hit stop is down healthily and approaching stop. Despite this market feedback I felt the setups were too good to not take in INFO and AI. I originally took full size positions in both but as the day progressed I decided it would be prudent to cut them back a little bit so I sold 1/4 of each (also sold SNAP at this point). By the end of the day SBE and LAZR had both recovered which, while annoying for me, is a good sign for the market and makes me feel better about the amount of exposure I currently have on.
Most stats I look at suggest short-term weakness in the broad market but long-term no major warning signs yet.
Open Positions:
OZON (1/4)
LMND (1/4)
PLTR (1/20)
TDOC (1/20)
NTAP (1/10)
NVAX (1/20)
DKNG (1/10)
ATUS (1/2)
GH (1/2)
DADA (1)
INFO (3/4)
AI (3/4) 73% Invested