Taking 103K to 1.2million by Year End 2008

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Weekly Update for week 26 ended 07/12/2008

When it rains, it pours!

Awful week, down 24K (17%). I am sick.

On Monday capitulated and closed out the losing option position from last week (MA CALL) for a loss of 9.5K. The same day made a silly trade in ANR, buying near the high and capitulating near the low, incurring a loss of 6K. Stock eventually bounced back, but I was already out with a loss.

Then came Tuesday, and all hell broke loose. Bought ODP in the morning as it was selling off after soft retail projections. Thought it was overdone. I was in for a shock as the stock went down non-stop until I closed out at a whopping 14K loss.

NEVER PLAY THE CONTRARIAN ON A STOCK THAT HAS JUST PRE-ANNOUNCED. DON'T TRY TO BE THE FIRST BRAVE SOUL IN. YOU WILL BE SLAUGHTERED.

Yes I knew this, but here again failed to live out what I know.

Thursday was a net loss of 3K on ICE. The first position lost 9.6K while I made up for part of it with another call in the same that made 6.6K.

Next week, I hope to put into live mode the program that closes my position excesses based on strategy type. Non-profitable strategies must be allowed only tiny position sizes that shouldn't impact my account too much.

Code: 
Opening Balance:               	    	143,623
Net loss for the week 		        -24,603
------------------------------------------------
Net Balance:                   		119,020
Number of Trades	            	 19
Number of Profitable Trades    	    	 11

Since Inception of Thread   01/13/2008 - 07/12/2008

Opening Balance:                   	102,615
Net gain (Less Margin Interest)		 21,405
------------------------------------------------
Balance Before Withdrawal:            	124,020  (Up 20.9%)
Cash Withdrawal				 -5,000
------------------------------------------------
Net Balance				119,020

Number of Trades	           	593
Number of Profitable Trades        	333

Expected Balance at this time to be on track for Year-End Target : 
				       368,675


Status:			       Behind Target		(Based on adjusted balance before withdrawals)

Top/Bottom Discretionary Trades for the week

TICKER	ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE
	
ICEGR	2008-07-10-09-58-44	2008-07-10-10-21-39	5000	10750		17500		6655		ICE CALL
----------------------------------------------------------------------
ANR	2008-07-07-10-22-15	2008-07-07-13-21-57	1500	132600		126420		-6210		LONG
MALGX	2008-06-30-14-49-15	2008-07-07-11-50-44	1300	12090		2600		-9530		MA CALL
ICE	2008-07-10-09-38-15	2008-07-10-09-58-16	1500	134439		124725		-9745		LONG
ODP	2008-07-08-09-37-00	2008-07-08-10-41-23	10000	81685		67502		-14213		LONG
 
neke, would you mind posting a chart of at least on of your

trades sometime?..I'd be interested to see. Also why do you

trade options with every stock trade?... what strategies are you

trying to implement?
 
If the world doesn't end this weekend and no news is good news Monday morning, I suggest everyone go long ENER. It seems to be beating a fast path back to its previous high, and we can all start the week with a gain :cool:

(And if the futures are looking grim, we can always short poor RIMM.)
 
Neke, I trade point losers/gainers almost exclusively. With a big loser like ODP I would always wait close to 10 AM. compare what it does to the market to see if it is strong or not. If I see it trending higher while market selling off, thats a golden op. At least this way if you waited longer, you could at least have a easy stop, at day low if it went against you.

And, I think you probably know that trading around 9:30 will not give you high prob plays.

I remember going through times when I would have several nice weeks in a row, and the profit got into my head. It basically makes you think you need to make more, that what you made before is not enough, not making money fast enough. Then you see an some potential trade, and just jump in big (10k) shares thinking you gonna make a big profit quick. And then before you know it you lost 2-3 weeks of $. Someone on these forums said, trading is the hardest way to make easy money.

I had like 3-4 great weeks in a row, and each week made more than previous. Last week of that stretch I made $20K. It just got into my head, and next monday, I was up $8k that day which would have made an awesome week (potentially). I kept making bets cause I just had that feeling that its not enough, not making money fast enough. I ended that day -$20k, and held a position overnight (breaking biggest rule), ended -$10K the next day. So, basically, almost -$40K in 2 days. All because making too much too quickly got into my head.

Basically, making too much too quickly will ruin your trading unless you are really in control.

Imagine if you gambled and bought some calls before earnings one day and ended up $100K the following day. Do you think that would be a great trade? Most people would say it would be. I would say that would be a horrible trade because I guarantee that easy $100K would get into your head so easily, that you would keeping looking for another trade like that and would lose it all and more!

Maybe this is not you or your experience, but thats just how I see it from my trading.
 
Hi Neke,

Sorry about your loss, but think about this: you're up for the year and you have great weeks (I know, I know 10% up for a week is not that great to you) too regularly to be just a matter of random luck. It just seems that every once in a while you get in a downward spiral and start revenge trading your losses. Fwiw, it's happened to me twice too in the -ahem- three months I've been trading live, the last one last Thursday :(

As Cybtropic says, you are trading well, making money faster than you ever have, but then start thinking it's not fast enough (I was thinking of all the money I would be making if I had lower margins and kept compounding 70% of profits, I even got an Excel spreadsheet with a parabolic curve like yours) and then something goes wrong and as you said, when it rains, it pours... but it needn't be that way. I suggested before a cut-off point, a circuit breaker that when you lose x% you stop trading for the day, week, etc. or at least until you calm down (REALLY calm down, barely stop swearing doesn't cut it :()

I was thinking about whether this happened to everybody or just a certain kind of people (like me - maybe like you): when you're doing well it only gets better, but then at some point everything falls apart because your "perfect" performance has been ruined. The first time it happened to me trading I thought that well, maybe when I was doing well I just got lucky (no edge) and now I was being unlucky, but this other time I thought about it and realized it was a pattern in my life: basketball, work, women, you name it, I keep doing better and better and better, but then at some point push it so much because it shouldn't be just great, but perfect and then everything blows up. Perfectionism? Lack of tolerance for frustration?

Think about it, in your first post you said you wanted to aim for a 5% weekly compounded growth rate, but then you've never seem satisfied with any of your 10-12% weeks. I realize that you need above average weeks to make up for the losing ones, but maybe, just maybe keeping the size of the losing ones within reason would be a better path, less emotionally draining and with smaller drawdowns. You might also want to consider if readjusting your goal for the year every quarter and bringing down the slope of your ideal equity curve a notch or two might take off some pressure from you - and actually help to improve your actual equity curve.

I know you will retire rich, if it takes a few more months, so what?

Best trading,

Jorge
 
Cytropic, Sarvise:

Thanks for your analysis. I think now it is possible my target is having some negative effect on my action. I have over a dozen different ways of playing the market, that I call "Strategies". Each week I analyse the performance by strategies. Looking at the break-down since this thread started, I find that the top two strategies together should have made about 100% compounded, assuming they were the only trades I made. Altogether though, that is only 48 trades. This means the remaining strategies made 545 trades, but depressed my performance by up to 40%.

I am seeking a way to emphasise only those strategies, while keeping the rest to at least break-even. I know I would feel like I have wasted a lot of time if I only made 48 trades (most of which are closed the same day) in more than half a year. All the same, I know I can't keep depressing my performance in my desire for more activity. This is why I am putting in the automated check, which looks at each trade initiated, determine the strategy, and close it out if it exceeds the size limit for that strategy. I am putting low size limits for losing strategies, while maintaining the optimum size limits for the strategies that have proved themselves. Hopefully this will lead to a better account performance for the second half of the year.

And yes cybtropic, there is the inexplicable tendency to "trade just anything" when you have had a good run. One forgets for while that the gains were made because you were sober and making good decision on what and how to trade.
 
I think a beneficial analysis you should do is to review your past trades and determine what % of losing trades moved against you right away vs. what % of winning trades moved against you right away. I analyzed my trades and found that a very small % of my losers moved in my favor at first and I failed to cash in quickly or place a protective stop, but most of my losers moved against me right away and I often failed to exit quickly enough. About 90% of my winners moved in my favor immediately, although with a few winners that went against me at first the setup was such high probability that I averaged down and ended up making profit though I know this is very dangerous. Now I'm careful to place a stop at break even as soon as I'm profitable, and get out quickly when the trade goes against me. I trade many of the same highly liquid volatile stocks and options you do and if you're watching carefully for good setups based on support/resistance, market action and chart action, and then the trade goes against you more than 10% (options, of course, stocks I'd pick a tighter stop), get out and re-evaluate later. Downward momentum tends to be about 2-4 times faster and stronger than upward momentum, especially under current market conditions.
 
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