I made some changes to my system going forward, which should minimize volatility. While I enter positions in 1/3 and then 2/3 increments, I was working under the false assumption that not all my positions would get the full 3/3 fill, which happened during the great sell-off of 2011. In normal times only about 1/3 of my positions go to the full 3/3 fill before exit, so I had been balancing risk for the "good times."
I am returning to position sizing per equal cost rather than equal shares. While I was estimating actual average share price relatively well, it is difficult to gauge the risk taking. When I started my journal some of the smoothness of the curve was due to this equal position sizing by cost, I think.
I have coded my trading platform to alert me when the E mini crosses below its 200 DMA. In addition, I coded my system to only take trades when the E minis, as well as the individual equity, are above their 200 DMA, although it is a little late for that during this end of the cycle. I want to focus on buying dips on stocks that are in longer-term up trends as well as the overall market being in a healthy uptrend. For the time being, I may allow new positions as long as they are above their 200 DMA, even though the E mini is not.
I think the media, market technicians, and algo traders, give so much attention to the 200 DMA, that it is becoming a "self fulfilling prophecy" of sorts that when the market tests the moving average, it can signal a regime change. What I want to avoid are poor quality stocks dropping into the abyss, as well as large down moves in the broader market.
I exited some holdings today to reduce exposure that the system had already exited. Some were for less of a loss and some for more. I am holding on to the remainder of my stock portfolio for the time being in the hopes the market finds a bottom here, and then can trend higher for the remainder of the year. I know "hope" is not a strategy, but it is all I have going at this point.
I started the year with $47,853 and the current balance is $60,806. Net profit is $1,740 and the rest of the gains are from contributions. I can look on the bright side and just pretend that I have remained out of the market this year, and just now am entering.
I am returning to position sizing per equal cost rather than equal shares. While I was estimating actual average share price relatively well, it is difficult to gauge the risk taking. When I started my journal some of the smoothness of the curve was due to this equal position sizing by cost, I think.
I have coded my trading platform to alert me when the E mini crosses below its 200 DMA. In addition, I coded my system to only take trades when the E minis, as well as the individual equity, are above their 200 DMA, although it is a little late for that during this end of the cycle. I want to focus on buying dips on stocks that are in longer-term up trends as well as the overall market being in a healthy uptrend. For the time being, I may allow new positions as long as they are above their 200 DMA, even though the E mini is not.
I think the media, market technicians, and algo traders, give so much attention to the 200 DMA, that it is becoming a "self fulfilling prophecy" of sorts that when the market tests the moving average, it can signal a regime change. What I want to avoid are poor quality stocks dropping into the abyss, as well as large down moves in the broader market.
I exited some holdings today to reduce exposure that the system had already exited. Some were for less of a loss and some for more. I am holding on to the remainder of my stock portfolio for the time being in the hopes the market finds a bottom here, and then can trend higher for the remainder of the year. I know "hope" is not a strategy, but it is all I have going at this point.
I started the year with $47,853 and the current balance is $60,806. Net profit is $1,740 and the rest of the gains are from contributions. I can look on the bright side and just pretend that I have remained out of the market this year, and just now am entering.