ig0r Swing Experiment

I

ig0r

Was meaning to do this last night but never got around to it. Figured I would start a journal to keep track of a little experiment I'm running. I have a freetrade account that used to have quite a bit of money in it but after taking out the majority to add to my IB account, I'm left with $2,416.12. A note about freetrade, $5000 is needed to open an account but the account remains open as long as the balance is above 2k. I have 2-1 margin and pay no commissions. Freetrade is really great when it comes to stock trading during market hours, it's owned by Ameritrade so executions are perfectly fine, every month I have 20 commission-free trades of all types on all stocks, even OTCBB, after that it's $3 for each from 20-100 trades, 100-200 is $2 a trade, and over 200 trades it's $1 a trade. In other words, since I am swing trading I essentially won't be paying any commissions, this is why you won't see them included in my P/L. Now on to what I plan to do with this account.

My Goals:
  • Increase account balance by 2% a day
  • Not to lose more than 5% of equity in a trade

Plan of Action:
  • Use 100% of equity per trade but no margin
  • Take stocks priced below $10
  • Use chart reading skills to look for good short-term opportunities
  • Enter at close of last day (or open if it's at a better price)
  • Exit with 2% profit same day, if profit was not attained, re-evaluate position.
  • Do not stay in position if I determine that the opportunity is gone

I'll be posting my pick for the next day the night before and will try to keep this journal updated with current P/L. My play for today was PAX, took my 2%, account info below.

11/24/03
No Position
Equity: $2,416.12

I'll post my pick for tuesday later tonight when I get a chance.
 
Quote from Corso482:

Do you use market or limit orders?

You say the executions are good?
More...

I use all limit orders, 95% of the time I don't take the play if it gaps up a lot, learned that the hard way. I have had a lot of success with this strategy, took an account from 1000 to 8000 in 3 months, but I don't want to go over past performance; we'll see how I do in a journal. And yes, I even did some scalping with freetrade, I found executions to be quite good, especially since it's not direct-access.
 
Found two very nice plays today and am somewhat split on which to take (SYNM and AOLA), and I like to be fully committed (oh well) so... SYNM is the play, buy limit @ 3.68 and sell limit @ 3.76.

BUY 656 shares of SYNM, Syntroleum Corp
at LIMIT of 3.68 DAY

Profit target is at 3.76, I'll put the sell limit order in when I get around to it, most likely around 10 or 11 am
 
Quote from ig0r:

Found two very nice plays today and am somewhat split on which to take (SYNM and AOLA), and I like to be fully committed (oh well) so... SYNM is the play, buy limit @ 3.68 and sell limit @ 3.76.

BUY 656 shares of SYNM, Syntroleum Corp
at LIMIT of 3.68 DAY

Profit target is at 3.76, I'll put the sell limit order in when I get around to it, most likely around 10 or 11 am
More...

Missed my profit target by a penny, chart still looks good, I hold. Also, too bad I picked SYNM instead of AOLA (AOLA up 17%), it happens.
 
Closed out SYNM trade with 2% profit, took a little longer than usual but that's ok

11/28/03
No Position
Equity: $2468.48
+2.167% since 11/25
1 Winner 0 Losers
 
Quote from ig0r:

Closed out SYNM trade with 2% profit, took a little longer than usual but that's ok

11/28/03
No Position
Equity: $2468.48
+2.167% since 11/25
1 Winner 0 Losers
More...

So..... you made half a C note on your first trade and paid no commission.

Could you explain your stop methodology? How long would you have waited?

Michael B.
 
Quote from ElectricSavant:



So..... you made half a C note on your first trade and paid no commission.

Could you explain your stop methodology? How long would you have waited?

Michael B.
More...

Yes, the 2% profit target was about $50. No commission because I use freetrade, first 20 trades a month are free.

For this particular strategy, I'm only looking at price and bollingers; my goal is to pick extremely oversold stocks and take profit on a correction. The reason why I cut my profits short is because most of the time the stocks make a small correction and then continue down, I try to take a piece of that correction. As far as stops and how long I stay in trades, I simply take a look at the chart each day and put myself in the hypothetical situation of not having a position. If I would have taken the play again, I hold, if I deem the play not safe, I exit my position. I also have a 5% risk tolerance, if my equity is down more than 5% I exit the position. This has worked very well for me in the past as long as I don't let emotion effect my decision, I have learned to be honest with myself and with my analysis. Only about 30% of my picks don't reach the profit target the first day so the majority of the time I don't need to make a decision on exiting, the trick is to keep emotion out of the equation, trade every day like a new position.
 
Thank you for you informative answer....I agree with what you said about emotion. I find that trading stocks in a nonPDT environment could be troubling. You must observe that 60% of a stocks price movement is determined by general market trend.

I find to trade in this environment is to use scaling in and scaling out methods which of course could be used in a nonPDT account. Have you considered taking those opportunities? Don't let your goal decide for you when to enter or exit. Your discretionary style of looking at the chart and those indicators to help make your decision is noted.

Michael B.


Quote from ig0r:



Yes, the 2% profit target was about $50. No commission because I use freetrade, first 20 trades a month are free.

For this particular strategy, I'm only looking at price and bollingers; my goal is to pick extremely oversold stocks and take profit on a correction. The reason why I cut my profits short is because most of the time the stocks make a small correction and then continue down, I try to take a piece of that correction. As far as stops and how long I stay in trades, I simply take a look at the chart each day and put myself in the hypothetical situation of not having a position. If I would have taken the play again, I hold, if I deem the play not safe, I exit my position. I also have a 5% risk tolerance, if my equity is down more than 5% I exit the position. This has worked very well for me in the past as long as I don't let emotion effect my decision, I have learned to be honest with myself and with my analysis. Only about 30% of my picks don't reach the profit target the first day so the majority of the time I don't need to make a decision on exiting, the trick is to keep emotion out of the equation, trade every day like a new position.
More...
 
Quote from ElectricSavant:

Thank you for you informative answer....I agree with what you said about emotion. I find that trading stocks in a nonPDT environment could be troubling. You must observe that 60% of a stocks price movement is determined by general market trend.

I find to trade in this environment is to use scaling in and scaling out methods which of course could be used in a nonPDT account. Have you considered taking those opportunities? Don't let your goal decide for you when to enter or exit. Your discretionary style of looking at the chart and those indicators to help make your decision is noted.

Michael B.
More...

Yes, three major reasons why I trade cheap stuff. Higher volatility, more leverage, and that cheap stocks are more detached from the market. It's fairly easy to find good plays in bear markets and bull markets.
 
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