Trading Update - 6

Update 5 - Bull Flag 2 Trades

I can’t believe I’m already on part 6 of this series and it’s 2019. I’ve learned quite a bit from watching it paper trade the last few months.

Now that it’s January, I’m ready to test it semi-live. There are now two algos: standard bull flag algo from the other post, and another one that is more specific that trades perfect pennants and bull flags. Both are very similar in the way they look for the patterns and take the trades. The first algo sometimes takes choppy flags but also has ones that are perfect but don’t meet the critera of the pennant algo.

  1. Standard bull flag algo
    • Orders are submitted but not transmitted so I get to choose if it trades them
    • Sometimes finds choppy flags
    • Not as specific as the pennant algo but is the majority of trades and gains
  2. Pennant algo
    • Transmitted live
    • Looks for perfect pennant setups and bull flags
      • Must be all red candles (except the high candle)
      • Candle tops / bottoms must be inside the high candle
      • Pennants / flags: candle tops must downtrend along with volume
      • Pennants: candle bottoms must also uptrend

If the flag doesn’t meet the requirements of the #1 algo it shouldn’t trade the #2 algo due to how similar they are. I plan to let the algos do their thing unless I see an exit indicator. It’d be nice if the first trade it took was a winner.

Today it’s watching a lot more stocks compared to the holiday weeks even though the morning was painfully slow.

One attempted trade on $CRC that I canceled. Not a bad setup but the last time it traded it it dumped off then ran. Not really a fan of this stock. It did manage to hit the target after a slow grind up.

[01/02/2019 10:40:00] Entry 45 @ $17.19, target $17.65, stop $16.97 [ Bull Flag ]
Trailing stop: 16.97, 17.22
[01/02/2019 11:00:00] Exit @ $17.38 [ $0.18 ] (exit indicator)
Drawdown: $0.19 / -1.10%
Max profit: $0.18 / 1.04%
P/L: $8.32

I canceled another on $WATT. I’m not seeing any crazy volume stocks so none of these look like they will work. It also hit the target and would have been an $18 gain.

[01/02/2019 11:30:00] Entry 90 @ $6.34, target $6.54, stop $6.23 [ Bull Flag ]
Trailing stop: 6.23, 6.37
[01/02/2019 11:40:00] Exit @ $6.55 [ $0.21 ]
Drawdown: $0.10 / -1.58%
Max profit: $0.16 / 2.48%
P/L: $18.90

I’m thinking tomorrow I’ll just let it transmit all the orders it wants. I’m like trying to predict which ones will work and which ones won’t but that’s not how the market works. Worst case scenario I can just sell it back instantly for a commission loss if the flag is garbage looking.

Everything is live today. Big gap down in the $SPY like yesterday. Hopefully I get a win - even if it’s $2.

Watching 3 stocks by 10:00. 5 by 10:30. 9 by 11:00. If the market continues to sell off it’s unlikely there will be a trade today. Never know for sure though.

Market started to bounce around 11:00 similar to yesterday.

Stopping it at 1:00 PM. $SPY is just sideways in a range and it’s only watching 39 stocks. Not much going on today in terms of small caps. Eventually it will trade something like it did yesterday.

Try again tomorrow.

I just realized something with my $CRC thought process from yesterday and it goes back to what Mark Douglas said in Trading in the Zone. Each trade is random and unique even though we believe in our minds that what happened previously will have the same outcome again. I thought $CRC wouldn’t work because it hadn’t before. If I have more data to back up my reasoning, like with $NBEV, then I can assume flags usually do not work on a particular stock.

$SPY is up a lot from yesterday’s close. I’d like to see it get over 250, but there’s going to be a lot of resistance. Hopefully we see similar action to Wednesday with more stocks moving.

Not a whole lot moving this morning.

So I finally got an algo trade and it was 2. $FLXN and $TWTR.

Both of these I manually took profits/losses. $FLXN just couldn’t get over prior close so I sold when it started to crash into $12.25. $TWTR was really choppy and slow so I took profit on the ask when it finally broke over the high. It didn’t hit the target anyway so my exit was solid.

The $SPY did manage to get over $250 like I wanted due to some fed news which is really good. Monday should be interesting if the momentum continues.

$FLXN 5m/1m candles
$TWTR 5m/1m candles

$SPY held most of its gains but is coming down a little during premarket. I’m seeing quite a few things moving around which is good. I just want to get one good win in so I can build up a cushion. It doesn’t really matter because over time this strategy should come out on top. I just like the idea of trading with profits and not losing money in my account.

It’s almost 10:00 and it’s only watching 7 stocks. I’d be OK with it not trading anything since there’s not much moving besides $ROKU and $ARRY.

One trade on $EPZM for a $6 gain. I was watching this setup a few minutes before it took it but I was hoping it’d dump first because of that huge topping wick. I manually took profit into a large spike. I seem to be pretty good at determining when I should get out. So far no amazing trades that work instantly. Earnings season is coming up so that should get really interesting.

Stopping it at 11:00 AM.

$EPZM 5m/1m candles

$SPY is still climbing which is great. I just want to keep building up that cushion and hopefully one of these days get a full move out of one of these trades.

I don’t see too much going on so I doubt there will be a trade. It does end up surprising me a lot though.

Only watching 5 stocks by 10:00. Not looking too good.

Nothing going on today and the $SPY is now below yesterdays close so I’m stopping it at 11:00. $TMDI looked really promising for a 5m setup but it failed. I can’t wait for earnings season to start.

No trades.

$SPY is up again. We’ll see if it holds up. Not too much going on during premarket but there could be something later on.

It’s watching more stocks today but there’s not a lot going on. $TWTR, $HUYA, and $LJPC had early flags but they didn’t meet the requirements. It was about to take $WATT but it failed and it didn’t look good. $LJPC had another flag around 10:30 but it looked way too choppy. It somewhat worked but the backtest shows it would have gotten out due to a double top.

I’m just going to try again tomorrow. Everything is crappy today. I don’t want to push my luck until earnings season.

$SPY finally gapped down. It may go green later. Can’t really predict that. I got up a bit late so I’m just going to paper trade it today. I don’t see much going on anyway so it may not even trade.

No trades.

The last half of this week has been so slow I don’t have the urge to wake up early. $SPY is downtrending and it’s watching 6 stocks by 10:00. It may trade something since it’s been a while without a trade. I’m just paper trading it now. On Monday I’ll get back to live trades.

One paper trade on $AXSM. It sold for a $3 gain when a double top occurred and if it stayed in it would have hit the target. Not bad I guess.

[01/11/2019 12:10:00] Entry 90 @ $7.68, target $7.88, stop $7.57 [ Bull Flag ]
Trailing stop: 7.57
[01/11/2019 12:30:00] Exit @ $7.71 [ $0.03 ] (exit indicator)
Drawdown: $0.13 / -1.69%
Max profit: $0.06 / 0.77%
P/L: $2.57

No screenshots because I only want to catalog live trades here.

I think the ATR indicator is broken in IB or the smoothing done by TA-Lib is different. The ATR for all of the candles in IB are less than 0.10 and the algo would not trade if they are below that. Odd.

This is the start of the earnings season! All I want is a single win to keep building that cushion.

Significant $SPY gap down but it is earnings season so I still want to trade. Maybe it will reverse or there will be some earnings winners not tracking the market.

Got a trade on $SAEX that literally touched my stop for not even a second then ran. I’m not sure if that’s because a trade occurred below my stop or the bid dropped below it. If I didn’t get stopped out I could have had a small gain on this since it blasted through my entry afterwards. If I let the algo do its thing it would have been a break even trade.

$SAEX 5m/1m candles

Another trade on $USAT. I closed my algo app at this time since it was looking to trade $MBOT next. I should not have done that since at some point it has to have a win. This one would have been about a $7 loss instead of a full $11 if I didn’t close the algo.

So really I should have only been down like 8-10 total and maybe I would have let it trade $MBOT then. Ugh.

$USAT 5m/1m candles

[01/14/2019 10:35:00] Entry 43 @ $5.40, target $5.94, stop $5.17 [ Bull Flag ]
Trailing stop: 5.17
[01/14/2019 10:35:00] Exit @ $5.95 [ $0.55 ]
Drawdown: $0.82 / -13.46%
Max profit: $0.09 / 1.51%
P/L: $23.65

(I don’t think the drawdown / max profit values above are working correctly so just ignore them)

$MBOT would have worked but I decided against it because all these trades have been garbage. I can’t win. I should have let it do its thing, but I could not stand having another loss. I can afford to lose $20+ otherwise I wouldn’t be trading. I just hate seeing my account value drop.

You don’t get to choose which trades will work.

I will say that my fills are pretty solid on the stop losses. It’s not many shares but I haven’t really gotten any slippage on these.

I went back and looked at the trade data. Not a single trade occurred below my $5.80 stop loss which means stops get triggered if a trade occurs at or below your stop price. This can be changed in TWS but I don’t see anything better than “Last” which is the default. I’ve changed the stop price to be 1c below which should prevent stupid exits like this. It should not have been a loss!

Here’s the tick data for my trade time period. I’ve highlighted my exit. Somehow I got 5.81 and not 5.80 so either IB is doing a pretty good job or they’re slow on the executions and the bid popped up for a second. Entries/exits were both executed on ARCA.

$SAEX tick data

$SPY is up a tiny bit today and I’m seeing quite a few low priced stocks up. I plan to let the algo trade everything and never prevent it from trading. If you try to avoid more losses you will only end up with more losses.

Despite $MBOT going nuts it’s only watching 4 stocks by 10:00. There might not be a trade today since yesterday there were a lot. I plan to stop it around 12:00 if nothing is going on. The overall market has been straight up and the $SPY tapped 260. It needs to get over that level otherwise I expect there to be a dump.

Got a trade on $MBOT on the 5m flag setup. Lost $6 on it. I decided to bail early because it should have had instant resolution but the move got stuffed. The timing for it ended up being off and this would have been a win if I had held.

$MBOT 5m/1m candles

Next trade on $VHC. Another loser but this time I sized down to $5 of risk and let my algo do whatever. It sold it early when it topped at 5.50. This was amazing timing since it dumped on the next candle.

Good thing I adjusted stops to be 1c lower because this one dropped instantly to my stop price then came back up. I got a better exit because of that.

$VHC 5m/1m candles

Stopping at 11:00. Nothing else going on and today is not a good day for me. I will let it paper trade the rest of the day though.

I looked at the stats and currently the win rate is only 28% and this is because I got screwed on $SAEX, didn’t let it trade $MBOT yesterday, and sabotaged myself with $MBOT today. Otherwise the win rate is about 62%.

This is why I decided to algo trade. So it could find the right setup and I don’t have to worry about the stop price or where to get out. It does it all. Of course that doesn’t prevent self-sabotage and fear of losing. I’ve had so many losers in a row now that I never expect any trade to ever work. At least I am aware of this problem and can try to avoid making the same mistakes.

Trading is hard and I’ll make back the losses even if it takes months.

$SPY opened above $260 which is great. I couldn’t sleep much so I’ll be stopping at 11:00 so I can go back to bed. I’ve sized down to $5 of risk so even if I lose it doesn’t matter. Somehow $MBOT is still going.

Since I sized down I was able to just walk away after it took a position on $CENX. The algo sold due to a double top for a $2 loss. It’s a very slow stock. One of these trades has to work.

I realized earlier that accuracy is much higher since $CRC and $WATT worked from before but I didn’t let it trade them. Have to let it trade everything otherwise you have an accuracy skewed to the losing side.

Not as much stuff going on today so I’m stopping at 11 so I can sleep. I’ll let it paper trade the rest of the day.

$CENX 5m/1m candles

I let it paper trade the rest of the day and it got a perfect win on $UNFI. I can’t believe this strategy seems to only work when I paper trade it. It’s so frustrating.

[01/16/2019 14:45:00] Entry 33 @ $13.20, target $13.57, stop $13.05 [ Bull Flag ]
Trailing stop: 13.05, 13.23
[01/16/2019 14:50:00] Exit @ $13.58 [ $0.38 ]
Drawdown: $0.24 / -1.76%
Max profit: $0.32 / 2.39%
P/L: $12.54

I’m taking today off since I developed a sore throat yesterday and I couldn’t sleep. I don’t know if it’s just too dry and cold now or what. I really do not want to take a day off but I feel like I need to. I may also take Friday off so I can get back to it on Monday. This week has been crazy.

No morning paper trades. $FOSL was looking good but it didn’t take it. Would have worked out OK but it’s slow.

Later it got a trade on $ALDR. It almost hit the target after slowly grinding up. There was plenty of time to exit around $12.50.

[01/17/2019 15:15:00] Entry 41 @ $12.36, target $12.57, stop $12.24 [ Bull Flag ]
Trailing stop: 12.24, 12.39
[01/17/2019 15:30:00] Exit @ $12.47 [ $0.11 ] (exit indicator)
Drawdown: $0.21 / -1.68%
Max profit: $0.05 / 0.40%
P/L: $4.51

I may trade tomorrow if I start feeling better.

Took today off as well. There were a few paper trades. One on $HUYA and another on $HEAR. $HUYA got stopped out for basically break even. $HEAR was perfect and slowly grinded up to the target.

Yet another flag on $OSTK near end of day. Up $5 on that. Crazy how if I just stop screwing with things it ends up with gains.

Pretty good paper trading day. I just realized Monday is closed which is perfect since I still feel a bit sick.

Accuracy is 76% if I include the trades where I screwed them up, the $SAEX one, and the recent paper trades. That’s insanely good.

Starting to feel better but not enough to trade live. I want to start trading all day and I don’t think I’m up for that while sick. Maybe tomorrow but I might just take the entire week off to recover.

Not much going on. Huge market dump. One paper trade on $AXSM for a loss.

I’m writing this the night before. Taking Wednesday off again since I’ve got a slight headache now and I just want to not be sick when I trade. This could be the start of a new downtrend in the $SPY so I’m not expecting this week to be that great.

Got one paper trade on $SPI for a small winner. I’ll take it considering the entire market dumped today.

Also writing this one the night before. Still a bit sick so if I don’t wake up for the open then I won’t trade live. Anthem VIP demo comes out on Friday in the morning, so if I’m awake for that I may trade live for a few hours but otherwise I’ll be playing that instead. This week has been pretty slow for flags which is great since me being sick was perfect timing.

One trade on $TBLT but it didn’t get filled. Would have gotten stopped out for break even.

Very slow this week compared to last week so I’ll probably just skip Friday again and let it paper trade while I play Anthem. Next week should be better.

Took today off again.

Two trades on $OSTK. Neither of them had much follow through. The second trade did move up a bit and it basically got out break even.

$MGNX had this insane topping wick that I almost want to write code to ignore. Got a tiny move up then it dumped.

The second $OSTK trade would have made back the loss then on $MGNX there were several signs to get out like two topping wicks in a row. So today could have been profitable but it was pretty crappy.

Another trade on $OSTK. No follow through.

This week was very slow and that seems to happen a lot. Every other week tends to be good.

This is the last week of January. I’ll probably do a review of the month then start another post with more live algo trades. I’m finally not sick so back to live trades, and I want to let it trade all day since there have been some trades near 2:00 PM that worked well.

Big $SPY gap down and I don’t see too many stocks up premarket that look interesting. We’ll see what happens. If there’s nothing by 12 I might just go to sleep.

Got a trade on $AWSM that hit the target perfectly and more. I took it early because my heart was racing for no apparent reason. I think taking that week off made me forget about risk management and letting trades play out.

$AWSM 5m/1m candles

I’m taking the rest of the day off. There was nothing else really going on.

I was really tired so I slept in until about noon. I don’t think much was going on but it may have traded despite that. $AMD had a huge earnings spike after hours. If it gets back to $16-17 in a few weeks I’ll be buying some.

I’ll try to be up tomorrow morning for live trades, but I’ve developed some sinus pressure from my runny nose so if I feel like garbage I’ll be sleeping in again.

Head is hurting a bit so I’ll just take it easy and sleep all day. When I wake up I’ll see what it paper traded.

Algo didn’t start. Thanks Windows.

Last day of the month. I’m doing something that is crazy CPU intensive so I don’t want to live trade. Also, I’m pretty tired so at this point I’ll probably just wait until February to get things going. Finally not as sick so that’s nice.

Got a paper trade on $SXTC. Ended up being break even but plenty of time to sell at $7.90. Crazy spreads on it.

Surprisingly only watching 25 stocks by EOD so only that one trade in the morning. It wasn’t terrible just a little early and rejected $8.

January Trade Review


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Please remember that past performance may not be indicative of future results.