Val's Discretionary Trading Journal

[ValeryN]

Fully Automatic Stocks Trading is my previous journal. Been trading on and off for ~10y. Automated trading made me good money over past 3, it is a quite crude way though for handling exceptional opportunities and changing markets like what I believe we're seeing now.

Earlier this year I called NASDAQ top and since been farily inline with the market sharing with a few friends. Early November got my fully automated setup size reduced to 30% of it's typical, the rest of the capital will be used for discretionary trades or t-bills while waiting.

As with any journal here, how useful it will be we will know in about a year. If works out - general methodology and way of thinking shared will be useful. Plan is to occasionaly post ideas and their expressions via options, sometimes underlying or a combination. They might not be immediately tradeable by others as I could be too busy building a position.

Few rules:

1. Have a theme or high level thesis on the market / economy
2. Be on a lookout for high risk:reward opportunities to express it
3. Use as little capital as possible in a process
4. Have a plan written down around every position in advance
5. Start with a risk but make sure you get paid enough if right
6. Don't obsess over managing position, follow the original plan
7. Regualarly digest key economic data to evolve high level thesis

 

[Sekiyo]

These are solid rules.
Thanks for sharing.

 

[ValeryN]

Basics:

1. Finding great R:R opportunities is an ultimate goal
2. High level themes help to point where to look
3. No one knows what the market is gonna do

Few recent thematic observations that help me find ideas:

1. Raising interest rates. make equities less attractive and causing money to flow into less risky assets. They also cause unwinding of leverage in businesses, investements as well as personal assets. It's a downtrend till something fundamentally changes. Eg fed policy refersal or much softer than expected.
2. De-leveraging. due to raising interests takes time. Some people don't get the environment changed, some people/companies can't act differently, either way there is a trigger point in different asset classes and actors, slow at the beginning accelerating and cascading later.
3. US P/E Contraction have happened at some extent, but averages are still high from historical levels. If consumer spending gets hit due to unemployment spike, sustained higher costs and interest - lots of potential on the downside.
4. Global rebalancing and outsourcing. is happening. Some industries or critical dependencies will be coming back or near-shore, large partners off-shore will be divercified across a few willing and able. This won't happen overnight though, will likely take 10y+ to signifficantly reduce dependency on China and the low prices they allow more developed countries to have.
5. Tech sector. got hit first in this downturn (~70% DD for many companies). There is certainly more to downside for the sector but there are some deals to pick time to time.
6. Crypto bubble. have burst. Doesn't mean all is dead. No one wanna touch it right now. Rep is bad, cascade of bancruptcies is not over, there will be more. But R:R is on the upside after 76% decline in BTC. Bleeding will continue but regulators are stepping in and digging is good. As with many bubbles, once the blood bath is over real valuable winners materialize. The market been too saturated to see them before.

 

[ValeryN]

Currently directionally long China, short SPY and short TMUS, free cash is in ~1m t-bills. Cut off point for risk reward to me is 1:3. The best being 1:10. Typically I get into 1:3-5x with 3 profit targets, risk is often very conservative eg assuming full position loss. But depends on vehicle. Reward calculations done only PT1 and PT2 levels, T3 is a home run is pretty hypotherical so don't like to get distrated by that number but it's there on a chart and in a plan. Couldn't get good R:R on energy, crypto is getting there, sweet spot will be BTC 8-12k, but no clue on the vehicle I'd use yet for a trade. Recently built a large short position around a possible pivot in SPY, but with a tight stop. Will see if the time is right. Volatility is low and PUTs were cheap, doesn't take too much capital to try.

 

[tuxedo69]

So when should i enter?

 

[tuxedo69]

i noticed it ,doesn't take too much capital to try.

 

[HobbyTrading]

Fully Automatic Stocks Trading is my previous journal. Been trading on and off for ~10y. Automated trading made me good money over past 3, it is a quite crude way though for handling exceptional opportunities and changing markets like what I believe we're seeing now.

Will you stop the automated trading and only do discretionary trading going forward? Or will both run in parallel?

 

[M.W.]

Is this you?

Fully Automatic Stocks Trading is my previous journal. Been trading on and off for ~10y. Automated trading made me good money over past 3, it is a quite crude way though for handling exceptional opportunities and changing markets like what I believe we're seeing now.

Earlier this year I called NASDAQ top and since been farily inline with the market sharing with a few friends. Early November got my fully automated setup size reduced to 30% of it's typical, the rest of the capital will be used for discretionary trades or t-bills while waiting.

As with any journal here, how useful it will be we will know in about a year. If works out - general methodology and way of thinking shared will be useful. Plan is to occasionaly post ideas and their expressions via options, sometimes underlying or a combination. They might not be immediately tradeable by others as I could be too busy building a position.

Few rules:

1. Have a theme or high level thesis on the market / economy
2. Be on a lookout for high risk:reward opportunities to express it
3. Use as little capital as possible in a process
4. Have a plan written down around every position in advance
5. Start with a risk but make sure you get paid enough if right
6. Don't obsess over managing position, follow the original plan
7. Regualarly digest key economic data to evolve high level thesis

 

[Sekiyo]

Looks like China is paying today,
Jumped on board. Bought XPEV at open.
Seen all these Chinese stocks being bought heavily.
Went into the most relatively bought at the time.
Among these I've seen 3 car markers,
LI, XPEV and NIO. Let's see.

Guess it has something to do with relaxing the Zero Covid policies.

How do you connect the dots ?
Beside screening and finding commonalities ...

This thematic play is something I'd like play more.
All the great traders went this way, more or less.
Soros, Druckenmiller, Tudor Jones ...

Thanks.

 

[murray t turtle]

%%
Gasoline still going down, XOM had it below $3.00 gallon US\ MUR + others $2.82 cash/ a bit more for credit cards. Walmart {WMT} amazing , has reduced some prices\ stuff i like, like premium priced bread.
[2] I dont have an opinion on QQQ for today, but i noticed some went up+ closed up in NOV bear market of 2018.And back to bear trend in 2018 DEC.
But for year to date \QQQ cant even clear 200 day moving average much\ or even close above above 200dma , much @ all for the year.
Fun to buy a bargain on that premium priced bread i enjoy.
But one hedge fun manager [Larry Mint Hite] warned ''a lot of stuff is low priced for reason , would you want to buy a cheap buggy whip company??'' , Because a lot of stuff in stock market is priced low for good reasons .LOL
Thanks.