BOIL ENDED UP going above my entry - I raised the stops on it twice- the second stop just below my engtry but trying to give it some room for volatility. Boil was a definite mistake as it's low volume causes a lot of price choppiness- and wide spreads. This is illustrated in the gaps in the faster time frame charts. While i was able to view this chart occasionally intraday during market hours, it was interesting-to see the larger losing position at the open- decline a bit more, then reverse, and start to move back much higher than I would have expected. I found myself toggling between charts of SPY, VXX to try to get a sense of what was occurring. And- since my charts are not in Real time but lag- trying to make trades intraday based on a chart that is lagging is Funny! I think I can Upgrade to a real time chart for the cost of 2 cups of Sbux coffee- Don't know if the work load will allow me to make use of that better timeliness. 3 TRADES TODAY - And I think I managed them decently- I didn't panic on BOIL- as it started against me and allowed the stop to do what it was supposed to do- wait until it was hit- Once the market worked out the kinks, the price reversed, I raised the stop-loss realizing I was lucky- got the direction wrong-and it was valid to raise the stop instead of waiting to be proved right. The 1st raise gave it some room, the second raise was below my entry- when price moved a bove- and took me out for a loss of 1/8th of what it would have been had i reacted at the opening gap down. Lost $7. TZA - Again, this is another leveraged play - As A note- I should concede that my focus should be to develop consistency - and playing in the big league park with leverage is not the way to do this for a part timer. None the less, it was an interesting experience-in real time-real $$$ In thinking about the Big picture- trying to define where things are under the most pressure- small caps certainly fit the bill. Small caps have plenty of liquidity- Friday, small caps had a bit of a base being made- and I chose to take an entry right at the close on TZA- a short position- price was right at resistance from the day- stop was set if it went against me- a bit wide-Price was close to the point of Failure- so it would be a minor loss - Fortunately- Price went higher from today's open- No pressure on the stop. I caught the price action climb mid morning- on a faster 10 min chart- all was well, based during lunch, established a sideways consolidation- raised the stop- was taken out for a profit- and tried a reentry that I chased after lunch- Price came within $.20 of my target limit sell and pulled back into the close- holding overnight. I was not able to view the final hour- and would likely have sold going into the close. Holding the position overnight . I enjoyed executing the trade- it's obviously easier to execute on a winning trade- but I didn't want to cut the trade short- I felt a bit of frustration when price then started to move higher again- and it cleared the previous range and i tried to enter- Several adjustments with offers above the bid-ask were never filled and price kept rising- until i finally got filled right at that surge high- I felt like the trade had room to run, was gaining momentum, put in a target limit sell and had to close down the computer Didn't reach my target sell price- so now i'm holding overnight, I have meetings in the am and will not have any time- so I raised the limit sell to $66 and put a higher stop-loss in $63.50 above my $63.32 cost. All of this is real $$$ practice with relatively smaller positions- MY work schedule does not often offer me time to access the market/intraday.- the real time frame I should be involved in is the weekly charts- and only view positions on a weekend. Don't know if i have the iron for that kind of price volatility.
The outcome of that higher stop loss was a small loss executed today $63.16- a loss of $.16 from the 2nd entry I took & held- Chart:Stop-loss worked minus slippage, particularly compared to where the trade declined to.
There are a lot of good threads on ET - i just don't have time to read- Daal's thread :http://www.elitetrader.com/et/index.php?threads/global-macro-trading-journal.215992/ struck a timely note today (1.27.16) with me as i had come back after meeting again with a local financial adviser (Fiduciary) . DAAL's post commented on the role of using a manager:1.27.16 this whole benchmarking against the S&P500 is a little nuts. I would argue that someone who can't beat that index can actually be a great manager and even deserve his fees in any of these cases -If his drawdowns are significantly limited compared to the S&P500 and he still makes a nice return over the risk-free rate. If he tends to lose 10-15% in bad years, that's pretty good compared to the 30-50% of the S&P. A guy who compounds 6%-7% net a year with max 15% drawdowns will look pretty bad when benchmarked against the S&P500, yet I would argue he is a good manager who is doing good to his clients even though he doesn't beat the market -If he has some personality or communication characteristic that helps his investors 'stay the course' even during bad times. This enables investors to achive returns above the risk free rate for the long-term, something they would be unlikely to do if they pilled in with 100% of their money on SPY. If they did that, they could be all selling at the lows in a panic. But with the manager, they might just stay the course. Specially if the manager is in communication regularly with investors. That's why I wouldn't knock on Whitney Tilson even though I don't think he can beat the market #5675 Coincidentally, i have come to the same conclusion- that also supports WHY one might consider an Active manager for SOME of one's assets-And my spouse and i met with our fiduciary adviser who suggested this manager- If i was younger and had 30 years to go, I would likely simply choose a Robo model that would put me in a cookie cutter model based on Age and comfort to Risk and simply pay a .15- .5o fee to manage and periodically rebalance- Betterment.com, Wealthfront.com -Vanguard.com- are but a few of the low cost models out there- FEES are what kill an Investor's return. Historically, FEES have not been totally transparent- Investors pay High and hidden fees in their retirement accounts- Commission charges- annual Expense ratios- 12-b-1 fees- and "other". I have held a fairly large% cash allocation in my Company IRA for the past 1 year+- The intention-was to not pay the higher mutual fund expense fees, get exposed to an over priced market, and save myself some pain- And - to move the majority over to a Vanguard brokererage IRA account- where I would determine how to manage the funds using low-cost vanguard ETFs. I accomplished the 1st 2- but failed to make the larger transfer-but was comfortable with the "safety" of larger cash. (Retirement assets were not at Risk) . I understand the role of asset allocation & rebalancing - and had several models to select from- but i barely have time for an occasional trade- much less try to manage and rebalance. Asset allocation-counts- AS DAAL points out- while the SPY is considered as a market 'Benchmark" for performance- The RISK inherent is also -or should- be a real consideration. If owning the SPY means every 5 years you need to stomach a 30 % decline-do you have enough Rolaids to see you through that? Having an asset allocation of just SPY- would be putting all of one's eggs into a large cap us market fund. enter a diversified portfolio- combined with Bonds and mixed exposure to Intl, as well as US large,mid and small caps. An asset allocation model can provide both conservative and more Risk tolerant weightings- Following that, is the ability to rebalance the account to bring the account back into alignment- the assumption being that some sectors will outperform and eventually become overweight- while others lag- Over the long term- taking profits from the outperforming sells at a higher valuation, and investing them in lower performing accumulates assets at a lower valuation- It is along term model that reduces RISK- and smooths the portfolio equity curve from a static model. WE- my spouse and i- made the decision to put SOME of our funds into the hands of the asset allocation manager that will provide that rebalancing for us - and we will pay an annual expense ratio of 1.25% for the service. The funds that the service are based on are mostly low cost Vanguard ETF's with very low Expense ratios. I presently pay 7-10x the Vanguard fees in the Exp. ratios of the various mutual funds- and get no management or allocation adjustment. I think this low cost management model- and a lot of personal contact available- is a viable model going forward. An important point- the 1.25 is the total management fee for the year- assessed in quarterly increments- The only additional outside cost would be the $8 transaction fee to rebalance one account position- and that occurs only when that position exceeds the allowed range in the model. Quite honestly- I have a sense of having added some financial stability by employing both the financial adviser as well as the financial investment firm- both for a very modest expense. Value- is in the service rendered- and at the cost one is charged. While i understand the concepts and the models of asset allocation- I don't have the confidence that i have the time- or the real unemotional disconnect to implement suc h a strategy without trying to overthink and interpret- and pause- and Hope and wishfor.... instead of executing mechanically as is needed. Having the Human touch and contact to discuss this every quarter-or more often as needed- is another aspect a Robo type account cannot provide. After the direct costs of buying the various indexes- I am likely paying .75 per annum to have the account rebalanced as needed and periodic personal contact and assessment- Also- by going through the financial Adviser- We are able to start the account at a a lower asset value than most minimum individual accounts would be required- In this example- a $25,000.00 account meets the minimum through the adviser- If pursued independently, the minimum might be $100k. or higher. This allows those of us with smaller accounts to get the professional services of those with larger accounts-at a fractional cost. The industry is rapidly changing! Not putting all of one's eggs into a single basket is prudent-By employing just a portion of my assets for a small fee to an active management style of asset allocation-/rebalancing- I can monitor the results over Months & Years- not days or Weeks- and get a better perspective. I still retain the active trading account, and a bit more in separate Roth and Traditional - I think a better value buy will occur in the weeks ahead- I intend to put these funds back into the market - particularly if we have a sharp decline- instead of an atrophy. Test myself if i can Buy if there is Blood in the Streets-
As a follow up- I own DTN- raised the stop above the entry- I have a limit Buy substantially lower to Buy at $50.00 - (flash crash scenario) Financials have had a bit of a rally, looking to see a return to the downtrend - Buy-stop on SKF-$57.00 lmt 57.20 Not actively following the market at present-looking at a couple of price performance charts- small caps and financials are significantly underperforming the SPY by 2:1 decline. over the past 2 months. This does not suggest that the market has "bottomed" -JMHO- Buying opportunities may be found a bit lower. Of course, all of this could change for the better- but small caps are the underpinning of the US economy- worth watching. If Financials and small caps are declining together- perhaps that suggests an underlying fundamental weakness that is worth paying attention to. The Buy-stop reflects a possible entry shorting financials- The recent trend was financials were in decline- had a bit of a rally, and today gave an attempt to move back into a decline-
The SKF position - The initial buy-stop fill was followed by a slight pullback- but not all the way back to the prior swing low- i held- and today SKF moved up nicely. However, the Fed speaks Wed - and since they now throw their weight to find ways to stabilize the market- Will they proclaim a longer pause before raising rates further? I think bears like Peter Schiff - may eventually be correct in their assessment that this will end badly- just they have been way early- synonymous with being Wrong in the fast time frame we exist in. Not realizing how much influence the Fed has been able to exert on controlling market sentiments, simply by policy . The Fed policy and the market reaction will simply become a footnote historically- but for those of us immediately affected in the Here and Now.... it is quite a different perspective to be in "real time" Conversely, I hold a long position in a dividend fund that today declined back to my entry- so i have raised the stop on DTN to break even- another sell-off in the market , and it will fill at a loss. I was not wanting to react to a small gain- but potentially i had a small profit, gave it some room- and it now appears to be at Risk of becoming a loss. Time to cut that loss to an absolute minimum if it occurs. These were not correlated trades- one appears to be benefiting the wider volatility swing- the other in decline
-yesterday, the DTN position stopped out $67.95 and today the Ultra short I had in financials SKF lost 2% of it's recent gain-closing the gap it had made. I caught the market action at a late break- I raised my stop from break even to get a touch of a profit on the trade- stop @ $59.00 executed almost immediately @ $58.81 - That stop execution was during the 2nd bar on the 1 hour chart- - 10:15 or so- Doing a post trade review- Trade was held for 7 days- Purchased 30 Feb 3 for $57.20. Daily chart - Uptrend appears to still be intact. Hourly chart illustrates the reason to react and not stay the course- but the tell is the bar i stopped out on was the low bar of the day- This makes a new higher swing low-to base a new entry against.
2.23.16 Haven't had much market time lately- With the indexes somewhat weaker today:And Europe overnight as well..... Following the market's recent rally, took 2 short entry positions today- Financials and small caps-SKF, TWM. Both entries are similar in that they have made recent pullbacks corresponding to a recent earlier swing low pullback from the prior uptrending period in January. $56.50 & $47.33 are the entry costs. My thoughts are that financials are still weak- still exposed to energy, and that the economy is not booming- and the intl financial sector has some larger concerns as well-You hear words like "contagion" now and then- and you have to wonder if we won't see further global concerns spilling back into the US. Small caps are still vulnerable- and would go hand in hand with a weaker financial sector- Entry at this level is at the low side of the recent range- close to a prior swing low and potentially gives a tighter ENTRY near the point of Failure- reduces the impact if these become losing trades.
looking at the Q's-QID leveraged short- buy-stop entry $35.25 -limit $35.40 -stop $33.50. I like a quote I read recently- as well as several times over the past-You have to smile- we've all been there! It goes like this- 'My reason for the trade was right- I was just Early" meaning- "I had a good idea that eventually came to be- I was simply too early- or too late - to make any money" that's hand in hand with 'Woulda,Coulda, Shoulda" . My leave from trying to toy with the market has been self imposed by more personally pressing activities that consume my free time- Just putting a toe back in here at what may be a swing low to try to get a lower risk entry. I may be "Early" in going Long these Short positions-LOL! What i do like about the execution of these trades at this level, is that i believe i see that price is revisiting a prior swing low, and moving higher- today- across multiple sectors- This allows me to define a close Point of Failure by viewing the prior swing low- and planning an appropriate stop - i'm inclined to consider the prior swing as to be the ideal low within a sideways channel- I feel i may be a tad early - as even the 2 hour chart has not given me a 1st move of substance- The final trade is a setup for Wed- Using QID moving higher with a Buy-stop entry $35.25 limit $35.40- Stop $33.50. Paying an insurance premium of sorts with the higher Buy-stop- but i think it often is worth it when the trade does not get filled-because it does not reach the entry level. Yes, it occasionally gets gapped over as well. I tend to like this entry as an EOD trader placing a breakout order the night before- Often with no opportunity to review the trade the following AM. Tonight i got caught up with considering today's and tomorrows prospective trades- and failed to focus on the remaining ceramic tile on the home project- still very much in progress- Getting closer on the interior- i did make some decisions concerning some of the IRA allocations- and i think i'm pleased with finally taking some action- Perhaps i mentioned this before- but some of the allocation will be handled by a professional-for a fee . For the portion under active management- I will be paying a 1.25% total annual fee- using a Bond ladder (not a bond index fund) and the remainder in a variety of primarily low cost ETF's with market sector focus- (Vanguard mostly) with some smaller exposure to commodities and Reits outside of Vanguard. For the 1.25% fee, the account will be rebalanced quarterly - or sooner if warranted. This comes at an equal-or a lower expense ratio and no service from the present Company IRA provider. It felt like i had finally taken a step in diversifying - and- quite honestly- it's not totally under my impulse . The adviser will follow a systematic set of rules and not be guided by emotional -what-ifs- or greed- or fear. These are usually the reasons many active investors fail to get a good portion of the market's return. A portion was allocated into an annuity for the low risk and guaranteed minimum return- The remainder will be managed by myself- if i can separate the desire for short term trading into a longer term focus- and leave that to just apply to the trading account- Back to the grindstone- get the home project out of the way this spring ,and i will have more time to challenge myself with becoming a more focused EOD trader-
2.24.16 pre market open-Markets look to be opening lower - Europe was down as well- The QID premarket quotes suggest the open will be above my Buy-stop limit. I 'll leave the limit as is for the initial open- might choose to take an entry higher later this am.
time enough today to post a chart- Trend is generally up since January- we had a bit of a market rally , pullback, rally higher- and a recent pullback- close to the recent prior swing low. The 2 hr chart gives me- EOD -a good view of what occurred- a pause in the pullback near $56- led to a 1st reversal higher attempt-over several days. It seems that a good percentage of these initial attempted up moves fail to hold - but it indicates some demand is stepping in- slowing the momentum of the decline A second attempt - off a lower price level would seem to be a higher probability trade-particularly if it coincides with a prior level that one could consider as a possible support range. In this example, SKF looked close enough to the P.O.F - that it appeared to be a reasonable DEFINED - Risk - a break of the prior swing low would certainly appear to mean the trade has failed. I set my initial stop just below that- trying to give some room for volatility. Another aspect of taking the trades towards the short side - despite the recent rally- Oil is still an unknown and affecting the world markets- If Europe is weak, the US is weak, reflected by market action, The financials and small caps seemed logical places to take short trades in. Rewarded today by seeing the markets gap lower favoring my 2 entries-made yesterday- Europe was weak overnight & selling off- Oil selling off- and that was reflected in the US open. Positions had gapped higher by the open -If you weren't in the trade yesterday, you looked at the gap move today and had to make a choice how to position QID attempted trade- opened up almost 3% above yesterday- I nudged my entry limit a bit higher-$35.52 - price went over $36 -but may pullback some later . (Qid filled 11:45) SKF moved up +3% and TWM 2%. Ideally, I would like to see these positions sustain a multi-day move higher- but the market may find reasons overnight to see a glimmer of optimism- such as the Cnbc news report a few minutes ago that Oil reserves are not as high as initially reported-Bizarre that Higher oil prices would make the markets rally- To balance the desire for retaining some profits, yet allow trades room to run is indeed a balancing act- Adapting a trading approach to suit changing market conditions /volatility seems to support acting more on shorter term holding periods. I'll likely look to take some partial profits, perhaps today- and ensure stops are raised on remaining positions.