Bob, do you use stop orders? if so, where would you have put your stop order in the cree trade. It looks like you played the break out to the short side. Also, do you scale into these types of positions? thanks! great journal!
Hi ebayuser, Thanks and I am glad you enjoy the journal as I enjoy making it. I do have stop orders but they are pretty wide (very wide by most peoples standards). Yes I was short CREE today. I scale into and out of almost all my trades. I am a big believer in scalling providing a lot of risk control. Best to you and your trading RW
Hi Bob, Your above post raises a good question. You've mentioned previously that you use math to make your decisions. You obviously use some specific criteria to enter trades, but do you use an algo to help you to decide when to average in to a trade, or is this left to discretion. Thanks. Jeff BTW, you make me proud to be a Cheesehead.
Hello Jeff, LOL yeah being up here in the artic tundra does have its moments and thanks for the kind words... My setups are purely mechanical and a black box could execute the trades. I do have an algro to decide for me when its time to start to enter in. Its also very mechanical in the exit as well. I like to think that I add value by actually manually executing the trades but they are becoming so cookie cutter that I am seeing diminshing returns (of my time with manually entering in orders) and at some point if the technology allows I might just code the box and let it do its thing. Best to you RW
Thanks, but I guess I'm referring more to your method of averaging into a position. As you know, I primarily run an API throughout the day, but I have been tinkering with a mean reversion strat lately which has been driving me somewhat insane. When you average in, are you using an algo for your next layer (IE distance between your first fill and your next order;layer), or is this based on discretion? Thanks.
Bob, how do you decide whether to trade the stock or use an option? I've noticed some option trades sprinkled in the mix occasionally.
I knew today would be a crazy day with the market up yesterday and premarket up so strong. Right out of the gate today started at a very fast pace. As can be seen by my what appears to be a never ending list of stocks I was busy. While I didnââ¬â¢t know how many trades I would be in at a time I did have a feeling that the day was going to be moving up in a strong manner so I was a lot more conservative with the trades than normal. This of course was a double edged sword as many trades would have made a LOT more money but I never ran out of buying power today either. I had a couple that really ran against me and at least one that I should have taken the gain while the gain was really good but all in all it was a smooth day considering just how busy it was. My scanner had at times over 15 stocks that could be shorted at once and the list of total stocks during the day was over 50. Much of this is written after the close and I would be lying if I said I remember even half these trades. At times I had as many as nine trades going at one time. Most of the day I had at least four or five. The ones I remember I exited early but there where many more. I also left a lot on the table as I was very conservative in many of the trades. So I wasnââ¬â¢t though and as fate would have it I ended up with smaller gains in almost all of them. I count about twenty different trades today which I think is a record for me. My Tradestation computer which I just recently updated with an Intel extreme solid state hard drive did have a slight issue right at the open but then it was smooth sailing for the rest of the day. Very impressed with the computer making it through the day without an issue. I did turn off one of my setup alarms so that I could focus on the best setups. While I do not keep track I donââ¬â¢t recall ever trading over 100K shares in a day before today so I guess I have a record number of shares as well. Not a big surprise with as many trades as I had. Todays gains are the second best of the day of this year and my account is at or near an all time high. To top it off I even have a massage later today to work out some of the stress. Live is good. ASH GU +196 ALV GU + 51 SBAC H, B6 + 1479 BWA B6, + 465 BGC H B6+ + 1549 LM H, B6 + 1924 JCI H, + 67 SNDA H, B6 + 425 APH H, B6+ 391 AKAM B6, +24 (out early) CMI H, B6 + 945 HOG B6+, H, + 353 ANF B6+, H+ 578 MR B6, + 572 (out early) PENN B6 + 359 SNDA B6 + 425 DPS GU, + 169 DLB B6, + 202 CTV B6 + 245 CREE H, + 8 + 10011 Day ~ 116K Shares
currently I manually enter in the orders on each layer but its based on an Algro that I "should" follow closely if I want to get the same results as the backtesting. With that being said a lot of discrection does come into play based on how many trades I currently have at once and what my account looks like etc.... Of course I could probably write a standard adjustments based on that information as well. I hope that helps and best of luck with your work with your Mean Reversion trading. RW
Hello Susannah, Good question and actually its easy. I sell calls on a stock when I think its over bought on a longer than one day basis. I am trying to get paid for the TIME as well as the movement in the price. Selling calls also allows me to profit even if the stock moves against me a little bit so its great for timing IMHO. Of course if the stock really moves in my favor I can lose some of the gains but overall I think the gains will be higher by selling calls on a stock that I think will stop going up at least for 2-3 weeks. I post those trades in near real time on my blog and I also call them out in the chat. If you want to know more about either one just PM me Best to you RW
Congrats on another great day. The way you stick to your system even when things are going poorly is an inspiration. What system did you use / how did you backtest your system? Did you have to test one stock at a time or did you have a set-up that allowed you to test an entire basket? Thanks, gl