Ryan's Trading Journal (F/A+T/A Strategy)

[Rypieee]

Hi all!

EOW 08
Portfolio performance up to date (Starting 10th of March 2017) = 6.05
Market performance (ASX200 Accumulation) up to date from 10th March 2017 = -0.06%

Today was a terrible day on the market, what a way to end the financial year!

Actions this week:
Sold off BBOZ yesterday just before the market went sour today.... My decision to sell BBOZ was due to us coming towards the end of the tax selling period and that my original intention of the BBOZ trade was not enacting anytime soon (in the next 1-3 months). If we had BBOZ today, that would've been awesome... but it could've gone the other way too. As July is normally a seasonally strong month + the surge of capital flowing into super fund accounts due to regulatory changes which will be invested in the coming month. I am still happy with my decision to sell.

We topped up our position in APX after it closed on $4.00 yesterday, injected another 3.33% of my capital into that trade after it displaying some strength (again) in recent times.



We have ended the financial year with a out performance of 6.11% in a period of 4 months. Now that we are heading into the new financial year and I have managed to knuckle down the way i track my performance, how i manage my trades and various techniques to improve on, I cannot wait for the new financial year to begin and start recording my portfolio for the full financial year (and many more) going forward.

CTD and ALL have hit their stop loss today on a massively down day but I decided not to sell the stocks as the negativity in their share prices were due to the overall market being down and a contagion effect from the US market last night. HOWEVER I will be keeping a close eye on them next week, especially CTD which is sitting on a relatively high P/E of 47.34 compared to industry peers of 24.63.

July will be a very interesting month as mentioned before, the super industry have experience a huge inflow of capital due to the changing regulations and investors trying to get their $540,000 contributions in before the EOFY. Along with that, history shows that July is normally a seasonally strong month as the tax selling and restructuring of portfolios by investors and fund managers subside. Me thinks this July will be even stronger in comparison to previous years. Do note that risk across the globe is slightly elevated such as Trump's inability to push through reforms or keep to his promises, Geopolitical risk in the Middle East, China sea and North Korea, equities across markets are considered "Over-valued" by many professionals and the end of the "Easy money" as central banks start to unwind their monetary policy easing - could potentially see inflated asset price come off.

We will be riding the uptrend until the all comes tumbling down Expensive stocks can become MORE expensive and cheap stocks can become MORE cheaper - 101 Trend following.

One thing that I am looking forward to in my portfolio are my gold stocks - NST and SAR. The greenback against the Aussie is widening due to overall weakness in the USD, I am expecting for the USD to start improving against the AUD as the fed starts raising and erasing the premium gap that Australian bonds have over the US bonds. This would bode well for the aussie goldies as they would benefit from a stronger USD once they translate the currency back. One thing that could stop that from happening would be if the resource sector starts running hot against due to the Chinese property market, which would elevate the AUD, the commodity currency. Geopolitical risk has not be in the newspapers as much as it was 2-3 months ago but that does not mean that it has subsided and we are still erring on the side of caution.

Have your portfolios done well in FY2016-17?

IF there is something that you have learnt about yourself in the last 12 months and you know how to apply that to investing to improve your outcome, what better time is there to implement the changes than the start of a new financial year!? I know I have learnt a lot more about investing/trading and also on my personality and I still have a long long road ahead of me, but I am excited to meet new challenges head on as new doors start opening for myself!

Have a happy new financial year!

Warm regards,
Ryan

 

[Skate]

Hi Ryan

A REMINDER from your previous post:
"The second thing that I want to be better at in the new FY is to "execute my trades properly". There have been a few trade that I have done in the past (after reviewing my previous trades) that were executed SOOO FREAKING BADLY and I completely messed up my risk/reward on the trade"

"I have also discretionary remove a stock from the portfolio due to little performance and guess what happens after I remove the stock from the portfolio?? Murphy's Law kick in and the stock zooms off..."

MY TAKEAWAY
Ryan saying to himself - "I should execute my trades according to my plan - or Murphy's Law will kick me in the butt"

REMINDER from this post:
CTD and ALL have hit their stop loss today on a massively down day but I decided "not to sell" the stocks as the negativity in their share prices were due to the overall market being down and a contagion effect from the US market last night.

Hmmm....
So much for following your plan.

A mate of mine once told me "don't ever think your better than your strategy"

 

[Rypieee]

You're right skate, I need a definitive plan to exit my trades.

When I was referring to the execution of my trades, I was thinking of my entries rather than my exits though. I tend to chase the price which destroys my R/R on the trade.

Thinking back to CSL and IRI, I still do not regret letting them go, especially with IRI, I shouldn't have entered the trade in the first place.

Reason why I didn't follow my stop loss with ALL and CTD is because I believe the trend has not been broken. The SP for them plunged because the entire market was down.

I'm giving them till next week to recover and resume their trend without allowing the broader market to indicate their intraday performances.

However, I still agree with you that I need to follow my plan if not Murphy's law will continue biting me. Have to continue working on my Trading plan as we go.

Thanks for the lookout, appreciate it

 

[aus_trader]

Have your portfolios done well in FY2016-17?

Good to see you have done well with your portfolio this FY and hopefully keep it up in the FY ahead. I have also had a good outcome in my "longer term stock portfolio" in the open positions. These will carry through to next FY with new positions added along the way...

As Skate mentioned it's good to stick to your plan. It's a learning experience though, and fine-tuning it will come with reviewing the outcomes. So there will be set backs, learn from them but don't give up.

 

[skc]

Reason why I didn't follow my stop loss with ALL and CTD is because I believe the trend has not been broken. The SP for them plunged because the entire market was down.

I'm giving them till next week to recover and resume their trend without allowing the broader market to indicate their intraday performances.

However, I still agree with you that I need to follow my plan if not Murphy's law will continue biting me. Have to continue working on my Trading plan as we go.

Thanks for the lookout, appreciate it

I agree with Skate here. The correct action is to sell the positions that hit the stop loss. Revise trading plan such that stop loss is placed correctly (where trend has been broken), and do so for positions going forward.

A mate of mine once told me "don't ever think your better than your strategy"

I think if you are the one who came up with the strategy... then by definition you are waaay better than any one of your strategy. All strategies can be improved. All strategies die. The key isn't to never change your strategy. The key is never change your strategy on the fly (when you may not have the right emotion to make sound decisions).

 

[Gringotts Bank]

....when you may not have the right emotion to make sound decisions).

^^^

Emotion always interferes with decision making because money is an emotional topic (for most people).

 

[skc]

Reason why I didn't follow my stop loss with ALL and CTD is because I believe the trend has not been broken. The SP for them plunged because the entire market was down.

Just one more point. I don't think this reasoning is sound. The share price for all stocks are a product of company fundamentals and overall market sentiment. If one has price based stop loss, he/she shoudn't try to isolate whether a movement in price was caused by one or the other. It feels like a recipe for creative accounting on your own trading.

"I made $1m profit last year on my stock picks... but the negative overall market sentiment caused my positions to drop by $1.2m. I am a great stock picker. QED."

 

[Rypieee]

Yeah, you are right @skc and @Skate,

I have made my stop loss too reliant on discretion and can foresee it affecting my performance down the road. I will be sticking to my stop losses from now on.

ALL have been sold at $22.21 for a profit of 29.56%
CTD have been sold at $22.92 for a profit of 17.50%

I am guilty to the fact that I just wanted to give the stocks one more day to "revert" back to their all time high prices - especially since those 2 are one of the better performers within the portfolio, hence the emotional attachment.

Thanks for pointing that out, truth to be told, I couldn't really see myself getting attached to a stock until now...

 

[skc]

Yeah, you are right @skc and @Skate,

I have made my stop loss too reliant on discretion and can foresee it affecting my performance down the road. I will be sticking to my stop losses from now on.

ALL have been sold at $22.21 for a profit of 29.56%
CTD have been sold at $22.92 for a profit of 17.50%

I am guilty to the fact that I just wanted to give the stocks one more day to "revert" back to their all time high prices - especially since those 2 are one of the better performers within the portfolio, hence the emotional attachment.

Thanks for pointing that out, truth to be told, I couldn't really see myself getting attached to a stock until now...

Good stuff Rypieee. I admire your attitude.

 

[peter2]

I hope I'm not setting a bad example by seemingly using too many discretionary exits in the ASX momentum thread. It probably looks like I use them a lot, but not really. The most common event that I use a DE is after an unexpected price spike up. I DE or sell 1/2 knowing that the win is bigger than normal. The exit is based on knowing my AW stats. A recent example of this is the DE at T3 after ALQ spiked higher.

When prices fall unexpectedly the exit is quick but they're based on an exit stop that has been triggered by the falling price not on a DE.

Another DE circumstance would be do I sell at T2 or wait for T3. These decisions are based on prior swing highs or the current market sentiment. If it's bullish I'll wait for more. If it's bearish I'll take what I can get even if it's only +1R.

Other decisions that may seem to be discretionary are probably not. Raising exit stops may seem to be discretionary but they're done in response to price surges and changes in the market filter. Managing overall portfolio heat results in some decisions that may seem to be discretionary on individual trades but they're part of an overall portfolio management process.

If you've read the ASX momentum thread then you would have noticed that I'm aware of the dangers of too many DE's. I monitor the overall performance of my exits versus a few objective exit strategies. I presented a little table showing the performance of my exits vs a few common strategies and made a few observations about the comparision.

You may considering doing something similar to monitor the performance of your DEs.

 

[Rypieee]

I hope I'm not setting a bad example by seemingly using too many discretionary exits in the ASX momentum thread. It probably looks like I use them a lot, but not really. The most common event that I use a DE is after an unexpected price spike up. I DE or sell 1/2 knowing that the win is bigger than normal. The exit is based on knowing my AW stats. A recent example of this is the DE at T3 after ALQ spiked higher.

When prices fall unexpectedly the exit is quick but they're based on an exit stop that has been triggered by the falling price not on a DE.

Another DE circumstance would be do I sell at T2 or wait for T3. These decisions are based on prior swing highs or the current market sentiment. If it's bullish I'll wait for more. If it's bearish I'll take what I can get even if it's only +1R.

Other decisions that may seem to be discretionary are probably not. Raising exit stops may seem to be discretionary but they're done in response to price surges and changes in the market filter. Managing overall portfolio heat results in some decisions that may seem to be discretionary on individual trades but they're part of an overall portfolio management process.

If you've read the ASX momentum thread then you would have noticed that I'm aware of the dangers of too many DE's. I monitor the overall performance of my exits versus a few objective exit strategies. I presented a little table showing the performance of my exits vs a few common strategies and made a few observations about the comparision.

You may considering doing something similar to monitor the performance of your DEs.

Nonono Peter, you have been setting a great example of a good trader. I was just being too lax with my rules and think I know better...

I have much to learn and apply to my trading, baby steps i suppose

If anything, I should ALWAYS follow the stop loss that I set for my stocks. I didn't with ALL and CTD on Friday last week and it is a bad habit i do not want to learn.

I have filtered my trades between "Discretionary" and "Hard stop outs", don't have a lot of data at the moment but as i progress, I can evaluate and determine what I'm doing right and wrong.

 

[Rypieee]

Good stuff Rypieee. I admire your attitude.

Thank you sir

 

[Triathlete]

Yeah, you are right @skc and @Skate,

I have made my stop loss too reliant on discretion and can foresee it affecting my performance down the road. I will be sticking to my stop losses from now on.

ALL have been sold at $22.21 for a profit of 29.56%
CTD have been sold at $22.92 for a profit of 17.50%

I am guilty to the fact that I just wanted to give the stocks one more day to "revert" back to their all time high prices - especially since those 2 are one of the better performers within the portfolio, hence the emotional attachment.

Thanks for pointing that out, truth to be told, I couldn't really see myself getting attached to a stock until now...

Not sure what timeframes you are using for CTD, but I will make this comment if it was the daily chart then I would have looked to get out at $23.36 with an eye on a quick reversal to get back in.
If you are using the weekly than this is a standard pullback and will be watching the prices that are important now which I will be looking to hold at the $22.61 - $22.24 if it does than another run up towards $25.00 I would be looking at.....keep your eye on its next moves......

 

[Rypieee]

Not sure what timeframes you are using for CTD, but I will make this comment if it was the daily chart then I would have looked to get out at $23.36 with an eye on a quick reversal to get back in.
If you are using the weekly than this is a standard pullback and will be watching the prices that are important now which I will be looking to hold at the $22.61 - $22.24 if it does than another run up towards $25.00 I would be looking at.....keep your eye on its next moves......

I will definitely be keeping an eye on ALL and CTD for possible re-entry if a entry signal appears

Learnt from Tech/a to keep an eye on older trades

 

[Rypieee]

EOW 01 (FY17-18)

Portfolio performance: -1.26%
ASX Accumulation Index Performance: -0.31%

This week sells - ALL, CTD & NST.
This week buys - GTK, CGC (top up the position)

NST was sold off after hitting our stop loss at $4.60.
ALL & CTD were sold off after hitting their stop losses as per previous post.

Portfolio is sitting on 34% cash at the moment and we shall be waiting for entry signals to allocate funds.



Shall be running our scans to look for any potential/set ups within our pool of stocks

Been a little rough start to the new financial year but I gotta remind myself that this is only week 1 of 52 and to not be blinded by short term-ism.

Hope you guys had a great start to the financial year!!

 

[Skate]

Been a little rough start to the new financial year but I gotta remind myself that this is only week 1 of 52 and to not be blinded by short term-ism.

Rypieee your playing in a game where rational people sometimes make irrational decisions a game where you win some and you lose some.

Portfolio performance: -1.26% isn't ideal but keeping your wins and losses to percentages is the secret of disassociating stress from your trading. If you relate your Portfolio performance in dollar terms it does exactly the opposite.

 

[Rypieee]

Rypieee your playing in a game where rational people sometimes make irrational decisions a game where you win some and you lose some.

Portfolio performance: -1.26% isn't ideal but keeping your wins and losses to percentages is the secret of disassociating stress from your trading. If you relate your Portfolio performance in dollar terms it does exactly the opposite.

Leaving it in percentage terms is always the more "rational" number to look at and compare

Using dollar terms makes me start thinking what my losses/winnings could've bought and that is a recipe for disaster

-1.26% isn't an ideal way to start the year but it is part and parcel of my trading strategy, so I just have to keep believing in the system, don't make any unforced errors and stick to it.

 

[Cam019]

Any updates or news on this portfolio @Rypieee?

 

[Rypieee]

Any updates or news on this portfolio @Rypieee?

Hey Cam019,

Unfortunately the place where I work at now do not allow me to post on forums or give my ideas/opinion on trading/investing as I am now a representative of their business as it may be seen as a conflict of interest to the business clientele. [Surprisingly, they know about my thread on this forum]

I have also been busy and have not had much time to work on my portfolio as well

Overall my portfolio has been under performing the index so not happy about it as well but will hope to see some light at the end of the tunnel Still keeping my losses small and letting my winners run but in the current market, winners aren't running as hard and more losers within the portfolio. I have reverted to a "Protection" mode which means no new stocks will be entering the portfolio until the market stabilizes and finds it's direction again.

Current holdings in the portfolio are:
BUD, CAJ, CGC, GTK, IRI, LVH, MGX, OZL and PRT
Cash holding in the portfolio is 40%

Hopefully you are doing much better than I am!! I still follow your work on ASF.

 

[aus_trader]

Hi Rypieee, It's been a while and good to know you are keeping tabs on ASF.