Rol's Trading Journal

thanks. that will not be necessary. if you know what you are doing, great. just thought would offer my 2cents as i thought the thread was genuine.

all the best!
 
Taking a diversion from my strat.

Currently long 800 shares EWP iShares MSCI Spain Index Fd
Average price 42.46.

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you bet more than half of your whole capital on a single name? Wow, what a departure from your previous approach. Having worked in this industry for more than a decade it sounds like the turning point is approaching very quickly...

I hope not but I cant help this thought...



Quote from Rol:

Long 900 shares

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Quote from asiaprop:

you bet more than half of your whole capital on a single name? Wow, what a departure from your previous approach. Having worked in this industry for more than a decade it sounds like the turning point is approaching very quickly...

I hope not but I cant help this thought...
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Yes I know asiaprop, it is a risky venture. I need to get away from trying to out do my system. I was having a hunch that this country ETF was a sure thing. But even if it turns out a winner, it is a practice I must avoid.
 
EWP showing great promise. I will allow the strat to exit the position when the exit signal is given.

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you are right, it does not matter the outcome of this one single trade. But sooner or later the inevitable must happen. If there is anything you should have learned from 2008 then that ANYTHING can happen at any time.

But I do like your thread so far, one of the better quality ones here and you seemed to take a very good risk mgt approach thats why I am surprised to see this trade in your book. Seriously, I can only strongly recommend you to never do it again, you will pay for it otherwise, and you will remember my words. Just my 2 cents, you pull all the strings in your account...


Quote from Rol:

Yes I know asiaprop, it is a risky venture. I need to get away from trying to out do my system. I was having a hunch that this country ETF was a sure thing. But even if it turns out a winner, it is a practice I must avoid.
More...
 
Quote from Rol:

Thanks d08, I am sure many of us are walking the same path. I want to give others hope and convince myself that there is a "conservative" and workable way to consistently trade the markets over the long term. In addition, the journal reminds me to be disciplined and treat this as a business. You would not take wild risks with your business capital and expect to thrive.

You mentioned the DD and it is funny because last night after reading Neke's journal, I started displaying on my monitor in real-time what a 30% DD of my equity looks like in big red numbers. This is to remind me constantly what can and probably will happen at some point. Therefore, when it happens, I cannot say I was surprised or it was not expected. I should determine ahead of time if I can live with the DD. What I plan to do is "Make hay while the sun is still shining." In addition, I am counting on the resilience power of my strategy to make it back in due time.
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What about the 2% DD rule? Do you apply it?
 
Quote from short&naked:

What about the 2% DD rule? Do you apply it?
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I don’t apply it as a stop loss amount. If you are referring to risking 2% of capital per trade, that also would not be worthwhile at my current equity level. At an average max dollar cost of $9,000 per position for my current parameters, 2% DD would only be $180. As you can see from my profit distribution I posted over the weekend, I frequently have stocks down 5-10%, or a little less than half as much as are up 5-10%. Thus I would be constantly getting stopped out at a 2% stop loss.

What I do, since my system is portfolio based, is consider the drawdowns on a portfolio basis, rather than on a stock by stock basis. The market correction between February and March made me realize I was taking a bit too much risk because the intraday DD I experienced touched 10%, which I was not comfortable with, even though my system survived. This is basically the approach I have taken is to just look at my unrealized loss relative to the market conditions, and adjust the parameters to my comfort zone. This probably would not be acceptable to some purists out there, however.

I know during a black swan my system could suffer a 30% DD, so that is another number I keep up with. I don’t expect my long only strat to be knocking it out of the park during a black swan. I do think it will do better than buy and hold, or me trying to time the market discretionary. I think knowing well in advance of any market decline the maximum number of positions you should ever be holding, can help immensely with controlling risk. The nice thing is I have been able to code this into my strategy.

I am always thinking of different ways of looking at the markets, and a trend following short strategy would definitely be helpful.
 
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