SKC,
I notice the earlier trades seemed to have a bit of FA in the decision making, but now it seems more technical, as in.....
Any reason for the change?? Does this affect stock selection and performance of your system in response to the change??
As you may notice the dates of trade entries they were not necessary all later trades... they were just being reviewed later.
I guess stock fundamentals for me is a filter to not to take a trade, rather than a filter to take the trade. I usually look at a stock's Webiress profile and the headline for recent announcements. With junior explorers there is really no point in doing anything in the finanicals, and I am not knowledgable enough to understand their exploration prospects. But I do tend to check that they have enough cash to last more than just a few quarters. I have not detailed these in the review.
I have not reviewed whether performance is better with stocks that I am more familiar with. But given my short holding times in the average trade, I doubt one can easily attribute any observation to fundamental knowledge or there lack of.
Also you have bought both breakouts and pullbacks. From your research is there a difference in win %, R/r ???
Unforunately documenting the type of trade is only a recent addition to my trade record, so I don't have enough data to make a good analysis. It is a good suggestion. Probably something I can do down the track by looking back at all my trades last year.
But I will say that, from what I recall, breakout trades will probably have a smaller average loss - as it's easier to set move stop up fast and tight once the breakout fails. Whereas pullback trades will have better R/R since they have more scope to run (if they do in fact run that is).
Finally, is your system performing as you expected given the current market over the same period??? Did you test how it would work in the negative period we have had/are in??
brty
The trades here are really discretionary and are based on strategies and patterns I picked up from various books, and stuff from my Nick Radge subscription (not individual trades, but the trading methodology). As such they are not readily back tested as a system.
How do I know it's profitable? I cannot be sure. But I know it is a tested methodology from someone who's been around for a long time.
And I know it will make money in a rising market. I don't expect it to be profitable in a negative period. And in times like now, I simply switch this strategy off - I have no position open at the moment.
My overarching game plan is actually quite simple... I put on many smallish trades when the market looks to be rising (which it did to me in early Jan), using patterns that probably have good chance of playing out
in a rising market, and manage my risk relatively aggressively so I'd be out if things don't work out.
In Jan I've done ~25 trades and I ended with a loss of 3% (hopefully I will find the time to detail all these trades), while running head in to a 10% market correction. I know it's no point just beating the market, but as a strategy, I think the risk / reward is there. If the market was to move up 10% instead, I'd expect my return will be far greater than that.
I am reasonably certain that this strategy will not work all the time, but it should work quite well in a more volatile environment like we are having now. The most important factor is probably how early I start putting on trades on the market's upswing, as opposed to how well I read charts and pick individual trades well. It suits a new, low skill trader like me, and gives me the opportunity to learn about other aspects of trading (like things I've identified in this journal) within an environment of fairly controlled risk.