Thursday, 4 December 2008

Trades 04/Dec/2008

Watchlist:
ADBE,AMZN,BBBY,BHP,FSLR,JOSB,KLAC,KSS,MRK,MT,
NXY,PRU,SGP,SNPS,TGT,TJX,TOL,WMT,INTU,APC,JOYG


A good day today, despite some initial choppy action. Managed to catch the right side of the market coupled with good strong/weak stocks.

NXY (weak stock)

This came from Topgun scanner where I search for gap down and a fall below the 15 min OR. After the first two candles we hit ema resistance and trend down with it. The 8th is NR7 pullback. And I shorted when I judged the market to turn down. Unfortunately the next candle was quite volatile and so I was stopped out for a loss. (Overall -1R).

KSS (strong stock)

This came from Topgun scanner where I search for gap down and a rise above the OR and previous day's high. So looking to fade the gap if the market is strong. The first is bullish and we then have sideways/up consolidation along the ema. I went long when I judged the market to be turning bullish. Unfortunately a bit choppy and I closed out of partial at loss of 0.5R as we came down. The market still had some legs though, so I gave the rest a chance and we did get into profit at which time I moved stop to breakeven. This is where I was stopped out a bit later. (Overall , call it -0.5R).

JOYG (weak stock)

This came from Topgun scanner where I search for a fall below the 15 min OR and previous day's low on higher than average volume. After the bearish first candle we have sideways drift in lower 1/3rd of the OR. Even when the market strengthened during this phase, the stock did not respond. We short when it falls below the OR and previous day's low as the market turned down. Took partial at 1R and also at $1 gain (3R). Missed the move at the end though. (Overall +2R).

APC (weak stock)

This also came from Topgun scanner where I search for a fall below the 15 min OR and previous day's low on higher than average volume. The 7th breaks the previous day's low and the 8th retests it as resistance. We enter a few candles later on a NR7 pullback and as the market weakens further.
Took partial at 2R and rest closed towards end of day for 4R. (Overall +3R).

AMZN (strong stock)

This came from IB scan with small gap up but big rise on first candle. The subsequent consolidation is in upper 1/3rd of the OR, and we go long after breakout and as the market strengthens. We take partial at 1R which is also close to $50 level and rest is stopped out at breakeven as the stock comes back. (Overall +0.5R)

---- Trades ---------------------------------

7 comments:

Z said...

Hi TraderAM,

This may be a random question, but based on your performance so far for the year, is it possible, in your opinion, to switch to trading full-time with 50K capital assuming that your performance does not vary much from year to year.

What do you think would be a good monthly Net R-value or a yearly Net-R value in order to become a full time trader?

OONR7 said...

very nice trading. Topgun looking pretty good.

TraderAm said...

Thanks oonr7.

Z.
Yes in answer to your first question. But that would be the minimum IMO.

If you can make 25R a month (300R a year) I would consider that a good return. It depends on your lifestyle, monthly bills etc as well. E.g. Some people could make 10R a month and that would be enough to live on.

If you have a good strategy and good discipline then some years you can make double or triple that. But it's not easy and you have to ride out the bad months.

rudy said...

Z - the real question: do you have a track record of proven success over a long period of time? If not you are deluding yourself! Not to be facetious, but the key to successful trading is just like getting a bank loan: you apply only when you don't need the money. Translation, keep your day job, until you have built up a proven track record. My 2 cents.

Rudy

rudy said...

25R a month at $600 a pop = $180,000.00 yearly returns. And you would modestly describe as "good", what would you consider excellent? lol

BTW, on average, what is your dollar risk per trade, if you don't mind me asking?


Thanks, Rudy

TraderAm said...

rudy.

I certainly do not trade at $600 a pop. Normally I risk $300 a trade.

rudy said...

TR: with a huge win rate like yours (+60% most months), and whipsaws at a minimum of 1R risk, and R-rewards +30 most months, why not press the bet and raise the stakes to 2%-3% cap risk per position?.

The only negative drawback is a sudden drastic price move that blow out your initial risk of -1R, which I will assume is possible, but extremely rare?. And looking at your +450 trades in the last several months, has never happened once? But even of it did, the most you stand to loose with such an unusually rare event is -2R-5R?

Just my 2 cents. Rudy