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:
Long: AXP, CRM, CSCO(2), DWDP, GILD, JPM, KR, MSFT, RIO, SLB(2), TWTR, WYNN(2), XES(2), XLE(2), XME.
Short: none.

Reflections

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.