3-30-15 – Trading Strategy
Real time portfolio updates are now available here
3/27/15 – BZQ (Inverse Brazil) @ $106.61
Stocks on the Watch for Next week
BZQ (Inverse Brazil) filled @ $101.61
The week finished off with another mixed bag of uncertainty. Many of my losses would have turned quite profitable had I been a dime or two more liberal. Sharp price reversals on Friday especially in the US based markets, assuming this was due to profit takers.
This has certainly been a very difficult market to trade in. More risk has to be allowed to ensure profits. However, Risk tolerance is a personal choice and I have failed to allow for the necessary risk to pull out profits the last couple of weeks.
Trading is based on time perspective as well, my goal, ideally, is to show profits each month, but I don’t use my trading account for monthly income, but longer term growth and the spontaneous withdraw for high ticket items. My focus is maintaining a steady increase in profits so I am profitable at the end of the year.
My 2014 started out very similar to my performance thus far, but within a couple of months I had enormous returns that reclaimed all my losses and put me on the fast track to a very profitable year.
Remember to always to maintain perspective, there will always be difficult months. It doesn’t mean your trading style doesn’t work, it just means you need to make slight modifications. So what are those modifications? Here are a few to consider:
- Stop Trading – Sit on your cash, if the markets are over volatile, wait until longer term price movements start to reach new highs or break longer terms of resistance. Step back from the shorter term perspective and look for trades that are breaking monthly trends
- Focus on Smaller Profits – A win is a win, and small gains are very good for the self-confidence, even if they don’t make up for a negative account balance.
- Take on more risk -Allow for more drawdown. If the stock you are investing in has a daily ATR of 10% or more, account for the fact that it’s higher than the recommended 8% maximum level of risk. If stocks are volatile, you can certainly lose more on a trade, but you can also gain more on a trade. I’ve had many 15,20 and even 25% losses and recouped them with similar gains in the opposite direction.Never take on more risk without making calculated adjustments. For example, I lost 8% on JDST this week, because that was my loss limit. If I had allowed it to drop to 10-11% that would have been enough cushion to put me near my original 15% gain!
Unless you are trading for monthly income, it’s the year end result that counts. Make sure you study all of your trades at least monthly to see if you were completely wrong to be in the trade, or if the technique you used caused a different outcome.
For example, my issues this month again were too low of entry orders (missing on big moves) and not allowing for more price movement (to aggressive on stop orders).
Current Holdings with Open Orders for 3/30/15
Sell BZQ (Inverse Brazil) Limit @ $120.90 (13.4% Profit)
Sell BZQ (Inverse Brazil) Stop @ $101.50 (4.79% Loss)
- PPO Turned positive on BZQ today on my entry
- Price is above all 3 moving averages
- Price is following it’s long term uptrend lines
I’ve tracked BZQ for the last 2 years, and based on my trading style the average move is 19%. I’m going for 2x the daily ATR of $6.08 to sell in case it makes a big spike up on Monday. I’m putting my stop in below the 20-day EMA @ $101.50 which will invalidate my move if I’m wrong.
New Open Orders for 3/30/15
No New orders for Monday, Friday’s reversals don’t confirm any new direction in the B12 Markets.