Intraday Trading PnL: -$8040
SPI PnL: -$6197
FX PnL: -$412.
As always there seems to be a misalignment between my records and actual statement because of the time the PnL is reported on my monitor.
Ignoring the SPI, the biggest losing day was $6586, and the second biggest losing day was $4030. Biggest losing trade was -5000. These are obviously completely unacceptable risk parameters. Cut down those losing days to -1000 each and you've saved $8500, aka net profitable on Swing/Intraday Trading. The same logic goes for the SPI trading, but I won't revisit the SPI trading for a while. Clearly the number one goal has to be to get rid of those kind of days.
This month cut through my profit from December and January; however the losses really started in Jan because I made a killing off the volatility generated by SNB and off an Australian ipo and they were the only things holding up my PnL on Jan. So this trend of creating losses by swinging for the fences and overconfidence has been around for quite some time. Little bit disappointing to say the least.
Overall, I feel like recently I have turned the corner a little bit by isolating the causes of the losses. These were outlined in my recent weekly review and will continue to be the focus for the next month. I had expressed some concern about focusing on too many goals at once; however, because they are related there seems to be a bit of synergy. To recap these are:
- Control risk by:
- High probability grinding type setups. Do not swing for the fences and try and hit a home run.
- Keep position sizes relatively constant. Risk $50-$150 to make $150-$500.
- Rinse and repeat. Similar to poker goal is to grind and grind. Serious opportunities present themselves with time. I have been playing a bit of poker semi-casually recently which helps with this.
- No losses on any individual shares to exceed $300.
- Use starter positions for every trade idea.
- Withdrawing every $500, while expensive in withdrawal fees will limit the size of drawdowns and help psychologically keep my sizes under control. Similar to cricket how to make a half century or a century just focus on where the next 5 runs are coming from.
- Focus on correct patient entries by:
- Get the good entries when everyone either really wants it or when they really don't want it.
- Get the good entries by anticipating. E.G. How much momo is left? Trend? Prior levels? Where has it come from? Hsa the well been visited before?
- Get the good entry by determining max pain point and that's the spot for extremely good entry. E.G. line in the sand wash and reclaim is extremely low risk entry.
- Patience!
- Remember the good feeling when a trade goes straight in your favour.
- For swing trades, it doesn't matter if you don't get an entry today because chances are there will be a retracement tomorrow at some point allowing entry, with probably even higher probability.
- The 9:30-10:00 time period most of the time can't prove a thesis wrong, so you can get seriously good entries at max pain here.
- Curb the level of overtrading by:
- Sometimes this can be solved by getting correct entry following the above process. With the correct entry I can avoid stopouts, and the resulting emotions that cause a fomo entry back in. This way a stopout will usually prove a thesis wrong.
- Avoid changing directional bias too easily. There's being flexible in thought processes and reversing after blowoff tops etc, and then there's being hyper sensitive to movements.
- In general I find that using limit orders and providing liquidity helps with this. This is obviously a generalisation.
- My overtrading/impulsive/boredom (and now I realise big losses) tend to be longs. I'm still not sure what conclusion can be drawn here, but it is interesting. Note that this doesn't relate to my trade ideas or anything it is a psychological thing.
- There is no harm in waiting to revisit an idea, you don't have to be straight back in. Maybe even take a walk around the house to get away from screens.
- Better scanning for stocks throughout the day.
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