All posts tagged EWW


I’m deciding to make a little change in how I write these daily trade reports. The nuts and bolts of what happened will still be reported, but I’m moving those down to the bottom of the post. The journey to becoming a better trade is not a reflection of the trades I take, but what I notice and how I think about the trades I do (or do not) take. If the reflections are the important part, then they should come first.

As you’ll see below, perhaps because I framed no trades this week, the portfolio is down to only two open positions, and one of those barely survived its stop loss on Friday. For that reason, I feel like I will be starting fresh on Monday morning.

The systems I presently trade buy pullbacks in markets trending upwards. Looking at the daily or weekly charts for my favorite targets, very few show strong upward trends at the moment. For the past several weeks, perhaps even 2-3 months, they have been trading in the same range. If there isn’t a 2:1 reward:risk ration available for the trade, I’ll pass on it. Since I started using 2ATR as my position size, that means I need 4ATR of possible movement to the upside before I will enter the trade. In this quieter more sideways movement of the market, that is leaving me with fewer trades to take. My reflections for this weekend leave me wondering if I should go back to a smaller risk amount to frame my trades, or if I just sit on my hands until the market provides me with the opportunities I know.

Swing Trades

No trades were framed for Friday, 8 June 2018. Six positions were closed: KR, XME, AXP, DWDP, JPM, EWW. Total return for the 6 trades: +3.85R.

Only 2 positionsin the portfolio showing +1.09R.
Long: GILD.
Short: AA.

Swing Trades

Following my observations yesterday about not framing trades for the short side, I framed 6 trades for possible entry and most of them were for possible short entries. The three that were willed were all shorts: EWW, AA, and IPG. WYNN opened below the stop, so both positions were closed out, netting +.32R total for the two trades.

There are now 21 open trades showing +5.07R:
Short: AA, EWW, IPG.


The month of May provided 54 trades which netted a paltry +.35R. Graphs of the trade results are included below.

The largest win was +2.34R. There were six trades generating losses greater than 1R. Three of those six were just a penny or two away, so can be ascribed to slippage on stop order fills. Two were opening gaps below the stop. Only one of the six can be ascribed to improper stop placement. I had two positions on in one stock and the second fill was higher than the first, but the stop was left at the price based on the first entry.

The month started in a sideways normal condition and moved more bullish, but also became more quiet. Thirty-six of the trades were channel trades. All six of the losses greater than 1R were channel trades. Clearly this is the easiest system for me digest for entry points. Many of the positions moved in my favor after entry, but the back and forth sideways and drop in volatility led me to close out many of these positions as losses, even when they had been winners at different times. Here’s the plot sequence for just the channel trades in May:

The above is based upon date closed. Here’s the same chart based on date opened:

While I was starting to feel like I might have been improving as the month progressed, when you see the graph by open date, that improvement is minimal. It should also be noted that these are all trades closed in May. Some were opened in April and held into May. Any positions opened in May but not yet closed, are not reflected in either of these graphs.

I believe all these trades were placed with the 2ATR initial position sizing stop loss. For my next step, I’d like to analyze the maximum negative excursion for each position in terms of ATR to determine if there is some earlier point when I can cut the losses to either keep them from running to -1R and/or change my position sizing so that with a tighter stop loss, my gains are multiples of my losses.

General conclusion for today: there is always more to consider about the log of trade results, and your viewpoint can influence the conclusions you might be tempted to draw.

Swing Trades

I framed two trades for possible execution today, but neither was filled. One trade hit its stop loss: EWW.

There are now 20 open trades showing +1.47R:
Short: none.


With the recent sell-off in the market, I realized that I am making my life more difficult by not framing and taking any short-side trades at the moment. In April when I change my position sizing plans, I also basically stopped framing shorts. I have no idea what sort of return I may have missed by neglecting the short side, positive or negative. I have been more consistent in taking channel trades, but have not paid as much attention to some of the other screens I do as they require tighter stops. As noted yesterday, tighter stops are one of the fastest ways to boost returns. One of the drawbacks of using tighter stops however, can also be a lower win percentage, i.e. more losing trades. The tricky part is finding the balance between stops that maximize the reward to risk ratio without encountering too many losses that reduce that return back (or below) to what I get with the wide stops.

Trading requires keeping multiple moving parts in highly functional states. When I changed my position sizing, I inadvertently changed what I scanned for in the market. In trying to fix one item, I broke another. Maybe that’s too strong. I disconnected another part of the system without realizing I had unplugged it. Now, I get to plug it back in and see how well I can keep the whole working together again.