2011: Rebuilding My Battered Account

[oraclewizard77]

This is silly. If you have a hard, time based, or mental stop you will not lose infinity.

Also, you can hedge your risk with higher strike options. Lets say MSFT is selling at $ 25.48. I could short the stock, and then buy the April $ 26/sh strike call for around $ .14/sh.

So lets assume Google buys them out for $ 30/sh. The most I would lose is only around $ .52/sh since the call contract specifies that I don't have to pay for losses above $ 26/sh.

Now lets be more tricky. Instead of shorting MSFT and tying up around $ 2,500, I could just buy the April $ 25 put option for $ .14/option.

Neke was able to turn a small account into a large account. You can't do this without having big brass balls.

Quote from stockstalkerv3:

If you go long, the most you'll losoe is 100% (assuming company goes bankrupt).

If you go short, the most you'll lose is infinity x your position. (Imagine a halt -- news release -- then the stock trades 10x what it wass before the halt).

It is for this reason I stay on the long side of my trades only.

 

[spd]

Quote from stockstalkerv3:

If you go long, the most you'll losoe is 100% (assuming company goes bankrupt).

If you go short, the most you'll lose is infinity x your position. (Imagine a halt -- news release -- then the stock trades 10x what it wass before the halt).

It is for this reason I stay on the long side of my trades only.

Nothing wrong with playing from the short side via selling shares or buying puts, but there isnt much of an edge in taking a position against a powerful up move because you think its over-extended. That was my point. That lesson cost me several thousand dollars.

 

[rallydog]

Shake it off Neke and move on. You're making a nice comeback here, push your account into the black.

 

[mastacoli71]

Quote from rallydog:

Shake it off Neke and move on. You're making a nice comeback here, push your account into the black.

Shaking it off is not going to get him into the black and he knows it.

 

[Epic]

Neke,

I've only glanced at the returns. Have you happened to calculate your beta and alpha? It seems that you look to find the trend and do really well in a trending market, wither up or down. Is this the case?

 

[neke]

Weekly Update for week 13/50 ended 4/9/2011

Nasty week, down 33K (10.8%). Completely gave back my recent attempts at recovery.

Took several severe beatings with no big gainer to report. On Tuesday got smacked by the virus (VRUS). Faded an over-extended move that kept going till EOD. The initiation was automated, but the averaging in was discretionary -- it didn't have to be that bad. Then on Wednesday got clobbered on AMSC on an ill-timed short position. Both entries and exit were horrible - lost 17K. Compounded it by revenge trade that cost another 5K.

Now I've got my work cut out for me to get back to positive territory. The chart is ugly.

Opening Balance:                	308,020
Net loss for the week 		         33,390
------------------------------------------------
Net Balance:                   		274,630

Number of Trades	            	 18
Number of Profitable Trades    	    	  8


Since Inception of Thread   01/8/2011 - 4/9/2011

Opening Balance:                   	335,899
Net loss(Less Margin Interest)		 61,269 (Down 18.2%)
------------------------------------------------
Net Balance				274,630

Number of Trades	           	 211
Number of Profitable Trades        	 120


AMSC	2011-04-06-11-32-28	2011-04-06-12-30-45	13000	197210	180100	-17134	SHORT	
VRUS	2011-04-05-10-58-08	2011-04-05-15-59-21	3068	289590	281918	-7719	SHORT

 

[d08]

Recently many pharmas have been rallying like crazy, overextending and then overoverextending some more.
I feel your pain with the VRUS trade, I was in for the exact same ride - it just trended without any correction. This market feels a bit strange, might be the new short selling rules affecting the behavior...

 

[ElecEquity]

Quote from mastacoli71:

Neke, a few suggestions speaking from personal experience trading the high flying momo stocks. Focus only on the risk of the trade. Write it down BEFORE getting into the trade. You will be surprised at the size and frequency of the trades you will actually take based on that plan. The winners will take care of themselves based on your tolerance for holding things.

This is great advice that I'm following in my own momo trading.

 

[rallydog]

Hard to say without breaking down your trades, not that you should be taking advice from anonymous posters on an MB anyway. So I'll just state the obvious which is you have a problem with risk control. AKA trade management.

Once again, it sounded like I heard you say "counter trend", in so many words. Okay here is a pearl, don't do that.

I watched you pull it out last year, so I think you can do it again.

Last thought, even the best setups fail sometimes, when they do, accept it and move on. Don't try to fix it by averaging in.

GL

 

[6yaNYCjm5m]

Well, I really don't get it any more. I've been following this for a while and was bouncing back and forth between “this guy really does not know how to trade” and “wait a sec, maybe there is something into this”.

I do not expect anybody to post strategy details and rules, hence I can only take a look at provided sample trades. I just can't wrap my head around anything there. Beyond the obvious issues with risk management, most of those big losing trades are not failed setups, but completely unwarranted entries to start with.

I can't guess what are the individual reasons behind the decision to have a journal, usually it's working on your discipline,etc,etc, however this one is not progressing well.
Furthermore, I am puzzled with the whole strategy. Based upon the previous post/opinions you are not a technical trader, rather using more of the fundamental analysis, yet there is auto trading and back-testing involved. I apologize if I misunderstood some previous posts as well, but apparently you do not read the charts that much yet your trades are rather short term-ish. Not so long ago NoDoji made a post about one sample trade suggesting you might benefit from using a little bit of that technique.

Somebody suggested, along these lines, “do not criticize, he managed to build big account from almost nothing”. I have managed to build reasonable account 2 years ago and then started doing what, it seems to me, you are doing here. I stopped trading and since then realized that half of my trades were just enforcing my bad habits. I was trigger happy short side and crude was going down, down, down...
I know I did the right thing when I paused, I hope I managed to learn and correct my problems, just starting again, so that is TBD.

Many people advised you to stop and take a break. My vote goes there.

I've spent those two years developing automated strategies (kind a good in programming), but the profitable one is still eluding me. However, the process helped me to get some new insights and coupled with cooling period, I feel much better about my chances in the next round.

So, I've pulled the charts of those sample trades you posted, daily chart and 15m chart. I put the lines to mark the entries based on the timestamp from your post. For the love of God, tell me how you can short the VRUS there, and why to get involved with AMSC at all? I really, really do not mean to rub the open wound, but as I said, I am completely lost there...

In any case, I wish you all the best.