It was a pretty interesting week we saw for just 4 sessions as the market kicked off the New Year. I took a number of trades, some of which worked and some of which failed, and that’s a constant reminder of a couple of things…
First, not every trade will work, so it should not be expected to work. That means it’s never wise to pile all available funds into a single idea! It also means that emotionally, less attachment should be made since the trade can be structured and executed well, yet result in a loss.
Second, it’s a reminder that trading is indeed a numbers game. Knowing there will be wins and losses brings us back to the original notion that to make progress we must have (1) an edge, and (2) opportunities to put that edge to work.
My edge is a technical one, so the more opportunities I have to put it to work, the better off I will be in letting that edge play out.
This week, I took several trades and diversified in a couple of ways. The first was directionally, as I entered both long and short-sided positions. The second way I diversified was via timeframe, as I took both swing (multi-day) and intraday (single-day) trades.
I wanted to just run through in a video how they panned out. Some worked like a charm, some fell on their face, and some didn’t do much of anything. Overall though, by managing losses and keeping capital turning over (without overtrading), it was still a good week. See you back here on Sunday.
Here’s the video, and I hope you find it helpful! (Be sure to watch full-screen and select 720p for HD quality).
I found a lot of nice setups on Tuesday for the long side as swing trades on Wednesday and entered five (not big positions). They all did well on Wednesday but some went down after that and some carried on going up. Ended the week even, with no gain or loss, which is disappointing for a bullish sort of week. I’m hanging on to all five, as none have qualified for my exit rules yet. The lesson I think I learnt was to be careful picking swing trades for the long side on a bullish day. There were so many all of a sudden and I think many of them might have been a bit fake. Now I’m thinking that a stock that looks good for a short trade on a bullish day might have better potential, and a stock that looks good on a bearish day for a long trade might be a more high quality pick. Probably stating the obvious, or maybe it’s not that simple, or maybe I need to improve my selection skills, or maybe all of the above.
Hey Mark,
I like that you stuck with your plan on those, and you’re correct it is tricky getting long after a big gap like we saw Tuesday. And I’d also agree that generally speaking, stocks showing relative weakness tend to make the best shorts…so long as they’ve been showing weakness and not just 1 day of it (ie: trending lower). Thanks for your comments!
Had a decent week Mark. I cut my losses on the not so good breakouts very fast and let the winners ride. Here my trades.
AGP +8.1% swing
SIRI +4.1% swing
MOS +4% day
SODA +6% day
CIE +3.6% swing
KOG, SWHC and P where +-0 trades as they didn´t follow through after the breakout.
Only losses
UA short -2%
VMC -1.1%
VPHM -1.2%
Achim, it’s all about cutting losses, sounds like you did that well – nice work! Wish I had taken AGP for the swing move, was a really good run. Small losses are easy to cover, your list exemplifies the concept I’m always trying to convey around here, thanks for sharing it!
Thanks Jeff, Very elucidating video. I wish you and your staff a prosperous Year.
I appreciate that Victor, and I hope your 2012 is great in every way too. Hit me anytime I can help out, that’s what I’m here for! Enjoy your weekend too.