Hello everyone, I have been absent for awhile but with the launch of Hive I decided to try this again. I am a developing trader who has been trading stocks, options, and cryptos for about 2 and a half years now. I am not profitable yet, but I did have my best quarter ever in the first quarter of 2020. I am trading very small size, and am just trying to learn. Obviously you should not consider anything I have to say financial advice!
Trading Journal 5-6-20
My entries have improved dramatically since I started trading but it is still a constant struggle for me when to take profits and exit a trade completely, especially when playing with one contract at a time. In more liquid names its easier to leave runners, but I usually only do that when I hit a double, and then if the runner doesn't work the whole trade is a scratch. How many trades have I let turn from winners into losers holding out for bigger profits, and how many trades have I missed out on huge profits from exiting? Where's the balance to be had? If I exited everything within 2 or 3 days, what would my P&L look like? Options complicate these decisions even more because of time decay and changes in volatility. For example even though GDX made new highs yesterday, my $39 June 19, 2020 call that I have left as a runner from an earlier GDX trade, didn't even get close to the 1.80 or so I could of sold it for when GDX was making its last new high on 4/23/20. The highest it got to this time was 1.10. So by holding out for GDX to go higher, even though I was right and it did, I missed out on $70 in profits. And with such a deep OTM option, its going to take quite a move for it to reach that value it had on 4/23/20 again. I feel better about it because it’s a risk free runner, but still it is frustrating. But then again, GDX might be $45 by the time that thing expires, who really knows? The point of all this is I need to do more analysis of my past trade data to determine when the best exits have been on average and use that knowledge when deciding to close out a trade or not.
Some trades from today:
TSU, I bought a put today near the close, standard failure test play, Brazil name, noticed that it is literally the opposite of the long pattern I like so much lately. I'll show a picture of examples of both just for fun.
Or now the long version of the pattern, entry was the green candle a couple days ago. Basically a couple higher highs and lows after a long decline. Stop under the trendline. This long pattern was working great in all kinds of sub 10 dollar names in January and February. It's still working, especially in biotechs.
Here's a trade I struggled with managing today.VNET, which I entered a call long on 4/30/20 and proceeded to hold it even though I should of stopped out the next day. I was just SO sure it would go higher. What I should of done was exit when I got stopped out and looked for a reentry point, which there would have been one. So this trade had already turned from a total loser back into break even, and then today it turned profitable. Plus you just had a beautiful three green candles in a row on the daily chart, you are still near the HOD print, and the QQQ's are going down. So I decided screw it, if it goes higher all well a profitable trade is still a profitable trade and I sold out. By all rights I shouldn't of even still been in the trade and I didn't want to deal with the psychological toxicity of letting a loser turn into a winner and then back into a loser again. This is why I can't wait to have enough capital to trade more then one or two contracts at a time. If I had 10 contracts for example, I could of just sold 9 and left 1 as a runner, booking profits AND having risk free potential to make more. Until then I will continue to have to make difficult decisions on a daily basis.
Other trades I exited today were
ZNGA entered June 19, 2020 $8 call on 5/4 for 0.38, once it hit the prior swing high today I put a tight 0.05 trailing stop on it and got stopped out at 0.58.
AQD entered on 4/28 at 1.73, exited most yesterday at 1.79, got trailed out on the rest at 2.11 today
New swing trades I entered today besides TSU were
CVE short, AMH short, WOW long, BYND long as an overnight lotto
My bias for tomorrow is bearish. Who really knows though? Good luck everyone.