Overview
Another volatile week with the NASDAQ chopping in an 8.6% range for the week! I was focusing on trying to catch some falling knifes and was lucky to get onto some strong bounces with minimal risk. I happened to be focusing on the Biotech sector as so many of them have been absolutely smashed, down 70-90% from highs not so long ago.
I had been talking about finding the “babies that had been thrown out with the bath water” as I still have on my charts some of the recent institutional raises. Surely some of these companies are trading at close to 1 Price to Book Ratio. I deliberately did not actually dig in to this to avoid confirmation bias or falling in love with a stock as I have fallen victim to in the passed.
Unfortunately my two separate accounts that I separated to have one account for the ASX and the other for International equities has become mixed. So I will have to start listing both.
Goals from last week
- Stop Trading Micros in the opening hour – Happy I stuck to this pretty well and it felt good as just as I had noticed, the alerts that went off in the opening 15 minutes seem to all fail straight away.
- Take Better Notes – I did improve this, but there were a few scalp trades that I missed and probably shouldn’t have taken.
Numbers
Trade Analysis
A+ Trade: PNV was one of the knife catching attempts that actually worked in my favor straight away. I jumped in late last week and it is currently up close to 4 X R. Need more of these! I don’t actually remember the catalyst for taking the trade. More evidence I need to take better notes during trading!
Update/Closed Trade Review:
As I may have mentioned last week, I had decided to scale out of my positions in 5ths instead of 3rds from now on, as I had noticed the position sizes were too quickly becoming too small. I stuck to this strategy by taking 1/5th off 3 days after catching the bounce.
My problem, as it has been the case so many times before, was I then raised the stop far too tight. I was stopped out on a gap down, only for price to recover back to near the highs. I really need to learn to accept the opening hour volatility and stick to the simple trailing stop on Daily 24 EMA. I would still be in the position with an extra $50 profit right now had I stuck to that!
New Trades:
Low Risk/High Reward Mean Reversion Trade: SPN
I had been looking at SPNs insane 76% drop over the last week or two as it was one of the companies I was super interested in on the way up (Study for new Graphite use cases) when I noticed RNU, another graphite related company come up on my gainers scanner, I checked SPN.
It had gapped down to a new low but bounced instantly. This gave me my clear Stop Loss location. I am not too sure what the catalyst ended up being, but it bounced 65% in the next 3 days! I don’t think I put a full R on it. Damn! I still have full size on it, but my full size is tiny.
Other Trades:
- I am still in MLX, KGN and SGR for a bear market bounce, but they haven’t quite bounces as I had hoped. Might look to cut them if they don’t by Wednesday
- IDT and IMU are the Biotech’s I zoned in on, I got a good entry on both, with half decent moves in the next 2 days. I just need to make sure I don’t close them too early like I did with PNV. I will make this a goal for next week.
Mistakes
- Raising PNV Stop Loss too close
- Not putting full size on SPN
- Having too strong of an opinion on CXO
Goals for the week:
- Patience!!! Give winning trades room to move.
- Don’t average down (CXO average down was poor form)
What does a Trading Journal have to do with Automating Tedious Tasks?
I have been casually trading for 4 or 5 years now. Throughout those years, I have lacked discipline and a repeatable process. Many great traders talk about the review process being equally or even more important that market open hours. It is a tedious task that I had been neglecting due to laziness. This Blog is to help me hold myself accountable and genuinely review the decisions made throughout the prior week. The ultimate goal is to uncover my most profitable setups and market conditions so I can begin to optimize or automate some parts of My Trading Process.