NRG Trading

[nomore4s]

While I'm a bit bullish atm on the outlook of the overall market, it is important to keep my eyes open and trade what is in front of me.

CBA had 1/2 the profit locked in today due to it running so hard so quickly. Because of my tight stop on entry I was carrying a larger than normal position size and was able to do this. I will now give the tade a bit of room and see what happens - I could give back a fair bit of profit here but.... - Prices back under $30 are a serious red flag.

NAB will have the stop moved up to either yesterdays low or todays low depending on how the US plays out tonight but if there is any strength left in this stock it shouldn't probe under todays low and definately not yesterdays low - depends on how much profit I want to give back.

NCM & CSL trades look like fizzers and fair chance of being stopped out of both tomorrow.

I'm starting to find a few short set ups that I like and will have a few orders pending for tomorrow.

The next leg down will now tell us a lot about this current strength in the market and whether it is a sustainable larger bounce or a short term bulltrap bounce.
I have attached 2 charts with a possible set up that could play out - the first chart is NAB which has a completed pattern on it (this was the pattern I traded with my current NAB trade) and the second chart is the XAO. This pattern could be invalidated tomorrow or next week but until that happens it is my favoured outlook.
Other possiblities are:
- Shoot straight through 3500 before a retrace, unlikely imo
- Retrace to 3200 where support comes in forming a higher low and then shooting up through 3500.
- Heads straight down towards 2800
All of the above scenarios will provide some good trades as long as you can get on the right side of the trade

And of course the market could do a million other things.

 

[nomore4s]

Still in play. But will 3200-3300 provide support? Making a higher low.

 

[Sean K]

3300ish is key imo. If it retests and holds well, breaks up on volume, much better chance of a much more bullish rise that I have been anticipating. ie, 50% plus gains in the coming months from this juncture. If broken down, back to 2800ish, and re-eval. I still hold out for a massive bounce from the oversold-scaredy-cat-doomesday-panic-lemming sell off from here, when all sheep get slaughtered. Once in a generation opportunity still lingering. Just get it fvcking over and done with!!!!

 

[nomore4s]

Pattern invalidated now. Want to see support at that 3200-3300 area now to form a higher low or I will have to rethink the bullish outlook.
Todays close tends to indicate we may be near the end of this current wave up. The question now is will we see consolidation around 3300-3400 or a higher swing low and straight higher or a retest of 3100 and/or new lows?

 

[nomore4s]

Current results.

Will probably have more closed trades tomorrow

I will now try to post updated results at the end of every month.

 

[nomore4s]

Trading results till the end of March.

I know I posted results yesterday but I will try to post results at the end of each month so each months performance is comparable.

Results would be very good if it wasn't for the first 4 trades, my trading has improved a fair bit since then luckily.

 

[JTLP]

Thanks for the results Nomore4s.

Just a question...do you have stop losses and trailing stops in play? It looks like your losses are significantly larger in $$$ terms than your profits (which to me looks like no). At the start of your trades it looked like you cut profits short...towards the end though you made some nice gains (well done!)

Also, what does the red mean when you highlight a certain share?

Thanks,

JTC

 

[Sean K]

Do you still need to take the fees out of that profit?

And tax?

 

[nomore4s]

JTC - the red trades are short trades.
I run trailing stops and as the trade gets to a 1r winner I try to move the stop to b/e or thereabouts. Alot of those early trades with small profits are pretty much b/e trades or 0.5-1R winners as the market took out my stops.
I don't want to let stocks that show a profit reverse and be closed out for a loss. I may miss some eventual winners by doing this but I protect my capital and I can always re-enter the trade.
Market conditions had a bit to do with all those small winners as it was very difficult for swing trading, but as the market conditions have changed I've got some trades that have gone on with it and currently have some good open profits.

To me it is all about protecting your capital and looking after the bad trades, the good trades that make your account tend to look after themselves.

 

[nomore4s]

Kennas - All transaction costs have come out of the profits. The only other fees to come out of the profit are interest fees for my margin but for this blog I'm not going to be bothered with that as it will have a very small effect on the overall outcome.

The profits are pre-tax.

 

[Wysiwyg]

Just found this blog, had a looksy and it`s good to see you confidently trading Nomore 400`s.

 

[nomore4s]

lol, thanks Wysiwyg, let's hope it continues

 

[nomore4s]

Current open trades for NRG trading portfolio.

Things going well atm, today was a very good day for the portfolio but I will probably give some back tomorrow.

Will be having a close look at my stops tonight to try not to give back too much open profit when the market does finally turn down again.

Will post updated results at the end of the month.

Date opened - Code - Type - Qty - Entry - Current - Market Value - Open Profit

 

[peter2]

You are building a good record NM. You must be quietly pleased with your results so far. I added today's prices in your open trade spreadsheet to see the latest results and your trading is improving. [ W% - 57%, AW/AL = 2 and growth on capital > 40% ]

Have you started to increase your trade risk yet?

 

[nomore4s]

Thanks Peter.

All the study and hard work is starting to pay off now, I have a system I feel very comfortable with - must continue to work hard though and stay consistent - especially through the next period of drawdown.

I have increased my risk slightly to around 1.5%, but it will depend on the set up and the current market conditions as to whether I use 1% or 1.5%. Still not comfortable using 2%.

 

[peter2]

Yes, you must trade in a consistent manner. The next challenge is to trade in the same way as your risk amounts increase. Btw staying at a comfortable fixed fraction (eg 1%) is preferable to a larger amount that may cause concern. I didn't know if you were using a fixed fraction or a set dollar amount. FF is much better than fixed amount due to the effect of compounding.

 

[peter2]

Van Tharp has coined a term called the System Quality Number (SQN). Briefly it is a calculation that provides a figure which describes the quality of the system (and the system user, naturally).

SQN = Ave result(all) / std dev of all results * SQRT(number of trades)

Currently you are running with a SQN of 2.5 and if you can keep this up for 100 trades (min and max number) you will achieve an SQN of 3.1.

SQN < 1 = Probably very hard to trade
SQN 1 - 2 = Average, needs to be >1.7 to be statisically significant
SQN 2 - 3 = Good system
SQN 3 - 5 = Excellent system
SQN 5 - 7 = Superb system (few exist)
SQN > 7 = Holy Grail

So what, eh? The better your SQN, the more you can do with position sizing to meet your objectives, like minimising drawdowns and maximising your chances of attaining your goals (eg +100% / yr with <20% drawdown).

All this is in his latest book. I am not plugging it, but rather using this concept to compliment you on a good job so far and hopefully inspiring you onwards and upwards.

 

[nomore4s]

Thanks Peter that is very interesting. Will look into it when I have more time. Might have to have a look at his book.

 

[nomore4s]

I've just worked out my current SQN by closing out all my open trades at the current stops levels which is a worse case scenario and would mean I give up a fair bit of open profit on the big winners I currently have. It comes out at 7.1.

If I close all my big winners out at current prices and the rest at stops it is 9.9

Now before anyone says anything these results are only for 69 trades and we will have to wait and see how the current open trades actually play out, and lets see what the SQN is for 150+ trades. And the market conditions have been very good lately.

 

[nomore4s]

I will also have to work out a way to keep track of my highest capital amount so I can work out my max drawdown from this level.