Frosty's Discretionary Journal

F

frostengine

Generally I stick to automated trading. However, for this journal I will be posting my discretionary trades I plan to make the following day. These will be swing trades with a max holding period of 5 days.

I will post the stocks I plan to buy at or around the open of the following day. I will then sell the stock at the open the day after it closes above the previous days high for long positions or closes below the previous days low for short positions.

If the trade has not been closed after 5 days the stock will then be closed at the open of the 5th trading day.

I will also "occasionally" close a position if I feel that market conditions warrant that action. No stop losses are used.

The strategy generally picks stocks that are very oversold and due for a dead cat bounce.

I am still in the process of tweaking some aspects of this strategy. Hopefully by having an open journal like this I can get some feedback.

The stocks for tomorrow are:

Long:
GPS
DSX
EV

I welcome any comments or suggestions.
 
Ok I have been filled on all 3 stocks.. the price shown in the average fill price INCLUDING the commissions I was charged:

DSX $21.28
GPS $17.03
EV $36.88
 
All positions are still open. The current PL for open positions as of todays close is:

GPS +2.35%
EV +.05%
DSX -.75%

Open Positions Total: +1.65%
Closed Positions Total: 0

None of the stocks closed above the high of yesterday, so none of them are set to be closed at tomorrows open.
 
Due to the initial gap up on MCD, I will not enter a position yet, will wait for it to pull back to yesterdays close, or not enter at all.
 
As a "retail investor" and not an ET, I read most of the forums to gain insights and being somewhat ignorant of the way most trade on these forums I never ask questions. But I do wait to read how the ET's respond to new Journals such as yours.

I am dissapointed this time as there are no replies, no comments, just silence! So I have to ask a question as why these "dead cats"? The only thing I could find is that they had gapped down on open......... is this it, or should I look again?

Regards.
 
I look at a lot more than just if they have gapped down at the open to determine if they are due for a bounce. I look for stocks that have been selling off very hard for the past several days. I also look to see if the stock is near a area that may offer potential support. Also like to see that the stock over the past 6 months or so has in fact been in a uptrend or at the very least sideways. I also like to see that the stock has been punished due to others in its sector or the market overall and not necessarily as a direct result of any news the specific company has released.

I have to be very careful once I find a stock that meets those requirements because more often than not the stock just makes a small "dead cat bounce" and then back to the selling a few days later. Normally this bounce is short lived, only a few days. So 5 days is the longest i'm willing to hold onto a position. I also like to get out after it closes above the previous days high to give me a quick out with some profit.

However, in market conditions like we are in now.. all 3 of the stocks i'm currently in have tried to make the dead cat bounce but the huge selling preassure on the overall market is making it difficult for them to sustain it.
 
Also you may find not many people comment on this journal due to this type of trading is generally considered "unpopular". Books always tell you don't try and catch a falling knife... but I think this type of strategy can show very low risk high reward opportunities when done correctly.

Just got my fill on MCD average price: $52.49
 
Many thanks for your responses, I use options to trade with the trend but for a slightly longer time frame usually 4 - 6 weeks.

I also watch for internal strength, stocks on the uptrend and a variety of indicators. But I had not considered the possibility of trading "gaps"...........I think the time frame is too short for me but not sure why I say that. I think I would have to buy stocks as the price movement may be too small for options to be effective.

Since reading your first response I did a little searching and it seems this unpopular trading method has its followers. For now at least I will just follow your trades.

Good luck trading.

Yuri_g
 
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