Neke, how do you calculate your position size?.. 1. Do you buy the same number of shares of goog as you would aapl or any other stock? 2. Position size according to account size 3. Position size according risk tolerance 4. position size according to volatility of the stock -- What I do is buy under 100 shares, then add the remaining when I think it's needed, usually after a correction. thanks cm
Not necessarily. Somewhere between the bid and ask, at a level I feel I could obtain an execution. Of course if I am in a hurry to get out or get in, I could hit the bid or ask. I determine quantity based on amount of money I want to lay out. Again that is normally a percentage of my account balance (anything from 25% to 200%). Options are normally smaller (5% to 30%). So yes, position size is based on risk tolerance and volatility of the stock, and is a percentage of the account balance
Weekly Update for week 23 ended 08/03/2007 I wish I didn't have to report this horrible performance so soon. But here it is. Only 7 profitable trades out of 23 for the week. Realized a loss of 10K from the position carried forward from last week. Altogether lost 30K before Wednesday. Then came the stupid trade that cost me 61K. Bought about $142K worth of call options on MA (when the stock was about 148) and watched the stock slide soon after entering, eventually going down to $141, when I closed the trade for a whopping loss of 61K. The leverage was insane, the timing of the trade off (watched the stock when it came down to $143 didnt buy, watched it go up all the way to $148 then bought only to have my head handed to me: it was obviously a dead cat bounce). And why did I expose 70% of my account to one option? Insanity. To complete the disaster, my Positions Monitor (my automated program that runs at home closing positions with excess leverage) had failed with a Java exception (array index out of bounds). At least that should have closed the excess, and limited my exposure to 40% of my account balance immediately after taking the position. Loss for the week came to 33%. It does appear I get complacent when I am above the trend line, and get down to brass tacks when below. I hope I can once again clear the line and remain above. To achieve this I need consistency in my leverage. From all my calculations, the optimum leverage on options on these types of intra-day and overnight trades is about 40%. My average exposure has been 20%, which is good. To allow myself to be complacent and stake 70% is an insanity worthy of chastisement. If there is any words of solace, it is the realisation that I am still up by 50% in the last one month (from beginning of July). Attached is a trend chart for my equity (adjusted balance before withdrawals vs expected). Code: Balance B/F: 248,847 Loss for the week (Plus Interest) -83,021 Cash Withdrawal -10,000 ------------------------------------------------ Balance C/F: 155,826 Number of Trades 23 Number of Profitable Trades 7 Since Inception of Thread 2/25/2007 - 08/03/2007 Balance B/F: 76,636 Net Gain (Less Margin Interest) 120,190 Cash Withdrawal -41,000 ------------------------------------------------ Balance C/F: 155,826 (Adjusted balance before withdrawals is 196826, up 157% ) Number of Trades 573 Number of Profitable Trades 327 Expected Balance at this time to be on track for Year-End Target : 204,277 Status: Behind Target (Based on adjusted balance before withdrawals) Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAINS/LOSS TYPE MALTM 2007-07-31-10-32-07 2007-07-31-14-36-36 10000 87830 108400 20388 OPTIONS (MA AUG 165 PUT) MALTI 2007-08-01-10-49-04 2007-08-01-11-03-37 8000 49600 57600 7859 OPTIONS (MA AUG 145 PUT) -------------------------------------------------- GRMN 2007-08-01-08-19-29 2007-08-01-14-43-55 6000 548939 538828 -10189 SHORT (2 trades) MALHJ 2007-08-01-12-07-51 2007-08-01-15-38-15 25000 145010 84350 -61086 OPTIONS (MA AUG 150 CALL) (Before Interest and Other charges) TRANSACTIONS ANALYSIS FROM 2007-02-25 TO 2007-08-04 Current Week | Since Inception of Thread | Method Gains/Loss No Of Profitable | Gains/Loss No Of Profitable Trades Trades | Trades Trades Automated AutoTrade1 -1948 4 1 | 7975 146 81 AutoTrade2 0 0 0 | 6472 5 4 AutoTrade3 0 0 0 | -4523 3 0 ----------- -------- ------------ | ----------- ------ ------------ Total Automated -1948 4 1 | 9925 154 85 ----------- -------- ------------ | ----------- ------ ------------ Discretionary Long 1626 2 1 | -61720 151 84 Short -24715 4 0 | 24698 146 87 Options(long) -57832 13 5 | 148419 122 71 ----------- -------- ------------ | ----------- ------ ------------ Total Discretionary -80920 19 6 | 111397 419 242 =========== ======== ============ | =========== ====== ============ Net Totals -82869 23 7 | 121322 573 327 =========== ======== ============ | =========== ====== ============
Neke, I like that you still took your 10K draw down. Even with the loss this week. That shows incredible discipline. Have you done a post mortem on your losing trades. Looking at what you did well and what you could have done better? Also, Do you think any of your trades were based on emotion this week?
O yea, that particular loss (61K) was a trade made on emotions (the entry, that is). There is no reason to have chased the stock on the way up (could have gotten it when it was down, but looked away). An of course the size taken was sheer complacency, and perhaps an urge to get a good profit since I was down at the time by 30K for the week.
hi neke sorry to see you had another bad week I know you have had plenty of good weeks also any chance you will slow down a bit in the size of your trades next week initially to let yourself focus more on "good versus" bad trades without having to worry about "making" your "goal" by year end ? good luck to you
Your results are fantastic despite this loss. But do you think the "emotions" you were talking about included added pressure of having to report 30 K losses and you bought more than you should and over leveraged ? Better luck next time ! Regards m
Wow, when you hit the shitter, you really hit it hard. Your experience stands as a lesson for everyone, and actually is more like the actions of a speculator or gambler, not a trader. I am sure you don't need this money to help support your family, as it doesn't appear that it is going to be doing that anytime soon, and actually, never if you don't change your psychology, and as you say "buckle-down" as part of your trading regime, instead of getting cocky and arrogant when things seem to be going your way, or throwing all reasonable measurements of risk management out the freak'in window. The market is real tricky like that. In this case, it seems that michaelscott had the right idea with the 100k cash withdrawal while you were on top, but it sucks to be proven right. Good trading, Jimmy Jam
it doesn't appear that it is going to be doing that anytime soon? With a monthly withdrawal of 6K, now stepped up to 10K, faithfully executed since the thread started from 76K, and you still do not see that? Strange! 170K taken out last year and you still do not see that? Very strange indeed. I expected something more concrete from someone who has been following the thread. Maybe I gamble once in a while, but in general you do not know what pure gambling is if this is the conclusion you reach after examining the curve. Speculation? that is what trading is in effect. Different people different risk profiles, but ultimately it is risk/reward and money management.