Trading Update - 8

Update 7
February Trade Review

This post is dedicated to March trades. I paper traded most of February and modified the algo a bit to fix a few bugs and add new exit indicators. See the “Februray Trade Review” link above to find out what I changed. I plan to paper trade for at least the first week March if not more.

03/01/2019

  1. $LB. Traded this one before. Small move then crashed. Worked eventually so I think I need to use the 9 EMA if it’s lower as the stop.
  2. $FTCH. Also traded this one before. Dumped pretty quickly.
  3. $VFF. Another instant dump.
  4. $OSTK. Nice looking setup that dumped. Usually flags work on this stock.

Friday’s just seem to be terrible in general. Most likely when I go live again I’ll skip Friday entirely.

03/04/2019
Not watching many stocks by end of day. There were a few that popped up but didn’t meet the risk/reward or failed before making a new high. I’m using the 9 EMA as a stop or a previous low so the risk/reward must be much higher in order for a trade to occur.

  1. $SE. Late day flag and it worked. My algo did sell it sooner than usual because it got super close to the target and didn’t get over quick enough. It needs some adjusting to wait several seconds then sell but it does work. Nice win.

03/05/2019

  1. $SE, again. No fill and if it were live I doubt it would have gotten it. It did end up working.
  2. $SE. Second flag failed.

03/06/2019
No trades. $BPTH would have been taken but the R/R was bad. The backtest shows a 1.45:1 risk/reward which is good so maybe I’ll use the last close price instead of the high for the calculation during live trades. It should have been taken which is weird.

03/07/2019
It was going to take $BPTH early in the morning today but the R/R was just awful and I’m glad I added that. The downside is multiple dollars and the reward I programmed is not capable of more than about $1 max.

  1. $YEXT. Good setup, break even though. It did double top so maybe I need to look back a couple candles before the entry. Eventually hit the target.

So far no dumb trades this week. Could just be from the market dumping and these are the only ones that met the requirements. Tomorrow is Friday which has been god awful lately. I did make a few changes after the last one so maybe it will do better.

I updated the crypto datasets if anyone cares.

03/08/2019
No trades. Pretty slow day in general.

03/11/2019
$WDC was setting up and would have worked but the risk was too high for it to trade.

No trades.

IB did something with TWS in the latest update that caused the charts and the entire application in general to be extremely laggy, and it has nothing to do with memory leaks this time around. 974 seems to be fine and luckily I had that older standalone release in a VM.

03/12/2019

  1. $PYX. This turd never works. It bought right into daily resistance. I’m not sure if I can determine if there is resistance other than looking at the highest high over the last 30 days or so.

03/13/2019
$NTNX in the morning but risk/reward was bad.

  1. $SLDB. Another failed flag that eventually hit the target.

I don’t know what I’m missing. These setups all look pretty decent to me yet almost all of them dump.

03/14/2019
Nothing going on again. I paper shorted $BOXL as it spiked into resistance. First entry was a bit early then I added higher into 4.18 which was just about the high. Really nice trade.

No trades.

  • I’m going back to previous low as a stop since the 9 EMA tends to be really far away. In the case of the EMA, it ends up taking even smaller positions and gets stopped out anyway. It doesn’t seem to matter.
  • I made some backtesting changes to make things a lot easier to test “waiting” a set amount of time before selling when a double top occurs. Eventually I want to add resampling 1m candles instead of ticks so I can backtest days at a time for faster results.

03/15/2019
Friday! Still not much going on. $SLNO had a flag that occurred the earliest I’ve ever seen. It did work but was not taken because it broke the 9:30 high candle.

No trades again. I tweaked it some to support super early flags but it still wouldn’t take it if the risk/reward was low.

03/18/2019
Both of these morning trades got stopped out due to a bug. What happened is they topped and failed but eventually broke out then it sold because the time of the tops was not cleared. Always good to find bugs like these before trading live.

  1. $VFF. Slow but worked perfectly and hit the target. Top was 5c higher.
  2. $AA. Got a little move but just couldn’t make it to the target.

03/19/2019
No trades. It was not watching much from the scans so probably not a whole lot going on. $AMD managed to spike and of course it didn’t crash enough yesterday to fill me.

03/20/2019

  1. $WLL. Stopped out break even as it tapped the stop then ran.
  2. $NTNX. I was in the shower for this one. Perfect.

I’ll test moving the stop to break even later on and using the 9 EMA instead if it’s up enough. I still don’t have an idea of the ideal amount of time to move a stop or even what price to use besides trailing an EMA.

03/21/2019

  1. $SOLO. Rejected $5 so it got out for a 51c loss.
  2. $NTNX. Sold on the same candle due to a double top. I may change it to ignore the entry candle since that is not enough time to determine an exit.

One it did not trade was $SCON due to the scan price limit I have set. The exit indicators I have seem to work pretty well.

03/22/2019
Big sell off today and it’s not watching many stocks so I doubt there will be a trade.

No trades.

This week has been great. Couple bugs but all the trades worked to a certain degree. $NTNX was perfect.

03/25/2019

  1. $DSW. Nice.

03/26/2019

  1. $DCAR. Almost instant dump. 200 EMA resistance it looks like.

I’m starting to wonder if flags don’t work that well on low floats. $DCAR doesn’t even have a float on IEX because of so many reverse splits. I may add a “0” check just to filter more junk. The 200 EMA check should have worked but it was off by like 2c, so I’ll also check the last candle and not just the high of day.

03/27/2019
Pretty slow so no trades.

I’ve been adding new features to my trading app when the market is closed. I’ve added things like supporting different timeframes which is useful if a strategy works better on something other than the 5m. I’ve also started working on another strategy that shorts into whole/half dollar resistance when it’s super extended. I noticed a lot of stocks top at those levels so might as well see if I can write a strategy for it. It seems promising but I won’t know until I test it during market hours.

03/28/2019
Slow again.

  1. $KNX. Stopped out break even due to a half dollar top.

No short trades on the new strategy. I actually decided to rewrite it to simplify things a bit.

03/29/2019

  1. $HTHT. Decent setup but the prior candle dumped before making a new high on the next one. It sold for a small loss.
  2. $VKTX. Got a small move before dumping.
  3. $AMRN. Perfect setup and nearly top ticked the exit.

These next ones are the whole/half dollar shorts.

  1. $WDC. Instantly stopped out.
  2. $TGTX. Off a little bit before getting a pullback.
  3. $WTW. Absolutely flawless. Top ticked the whole number at 21 and caught most of the dip. This trade made up the losses of the other shorts and more.

The ones that did not work seem to be from half dollars which is less significant resistance than a whole number. I’ll have to wait for more trades to see if I should only short whole numbers or not.

Weekend

This weekend I worked on a few things related to the short strategy.

  • Half dollars definitely seem inconsistent when it comes to resistance (at least from my limited sample size). I still want to trade them to get more data.
  • Looking at daily resistance that coincides with a whole number top and it being extended intraday seems to yield better results. $WTW fits that critera perfectly.
  • I went back and looked at $AMD which has been topping at $27.00 on the 25th and 26th at the open. This coincides with daily resistance from the 20th.

It’s still a relatively simple algo that has the potential for large gains. Have to see what happens on Monday.

Update 9



Disclaimer

I am not a registered financial adviser/broker/anything. Use this information for entertainment/informational purposes only. Any tickers mentioned are not recommendations to buy/sell/or sell short. They are used as examples only.

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