4 entries triggered on the opening drop today from my scan performed the night before that had resulted in about 130 names on the watch list. 2 exited at the close and Iâm still holding the other 2. I was tempted to move my stops up, but refrained because they had already moved well in my favor. Anyway, most of the time when I move my stops up, they are filled around midday and then the stock proceeds higher into the close. This happens almost as clockwork where the stock advances early, consolidates around midday, and then after a small dip, advances further to end the day. Not only is it easier for me to deal with losers without getting stopped out when using a manageable position size, but it is also easier to let my profits run without wanting to take profits.
I am often tempted to take a larger position size to increase profits, but I am not comfortable with the individual stock drawdown that would entail. I could handle a 20% system DD better than a 20% DD in a large individual position. I feel this is an area automation excels in regarding position management. Actually, I am becoming more comfortable being in cash. As the saying goes, being in cash is still a position. In the past, when I had a large cash balance, I would want to put it to work as soon as possible. This would often result in me getting into trades too early, when a setup had not occurred. The important thing about dip buying is to wait for the trade to come to you, rather than going to it, which is an additional item automation handles efficiently.
Here are the two trades that turned out to be day trades today. What I wish to show is the volatility one should wait for before an entry, and not take profits too early in the day even if a nice unrealized profit exists. The same dip occurred in the Spoozs today when it nearly hit 1300. It may have caught some shorts on the wrong side, trying to predict the day's outcome.
Real-time Account Net Worth $60,771.55
Beginning Day Account Net Worth $60,453.07
Real-time Overnight Buying Power $110,632.10
Real-time Account Balance $49,965.55
Real-time Cost of Positions $10,714.00
Real-time Unrealized P/L $92.00
Real-time Realized P/L (Today) $231.48
I am often tempted to take a larger position size to increase profits, but I am not comfortable with the individual stock drawdown that would entail. I could handle a 20% system DD better than a 20% DD in a large individual position. I feel this is an area automation excels in regarding position management. Actually, I am becoming more comfortable being in cash. As the saying goes, being in cash is still a position. In the past, when I had a large cash balance, I would want to put it to work as soon as possible. This would often result in me getting into trades too early, when a setup had not occurred. The important thing about dip buying is to wait for the trade to come to you, rather than going to it, which is an additional item automation handles efficiently.
Here are the two trades that turned out to be day trades today. What I wish to show is the volatility one should wait for before an entry, and not take profits too early in the day even if a nice unrealized profit exists. The same dip occurred in the Spoozs today when it nearly hit 1300. It may have caught some shorts on the wrong side, trying to predict the day's outcome.
Real-time Account Net Worth $60,771.55
Beginning Day Account Net Worth $60,453.07
Real-time Overnight Buying Power $110,632.10
Real-time Account Balance $49,965.55
Real-time Cost of Positions $10,714.00
Real-time Unrealized P/L $92.00
Real-time Realized P/L (Today) $231.48
. I think removing profits from the system is a mistake; just like early withdrawals from your retirement is not advisable. I view the power of compounding as an edge.