Monthly Review: May 2015

Back Account: +$17380.

Main Account: +$811. Note that this is an aggregate of swing trades and intraday trades because I wasn't able to record the PnL of swing trades while I was sick.

SPI Trading: -AU$2970 or US$2347. Going to stop trading the SPI at all, unless I put further effort into developing my edge. There's no need to trade it given there's plenty of opportunity and I'm going to put further effort into FX.

FX Trading: +$1300ish (I think? Stupid statement so hard to understand!). This arises from the one trade on USD.JPY. Going forward, I have decided that I will pay attention to FX trends actively, but only on a daily/weekly basis. So at the end of every week I will go through the charts and update a post on daily setups.
The motivation for this, is that while I have no intention of actively trading FX; every now and again there are some gimme setups, such as this USD.JPY long breakout, which in addition to nailing the breakout I would have been long from much lower if I had been monitoring it on a weekly basis.

So 3/4 profitable weeks for the month, which amounts to 8/18 profitable days. Much better consistency in terms of a weekly basis but the day to day consistency just isn't good enough. It is important to realise that with my frequency of trading and strategies I adopt it would easily be possible to get 14-18/18 days profitable.

This month I also had two events (mostly) beyond my control which cost me around $8k each so I was quite lucky to bounce back from them. This is really solid resilience. This was the brokerage error which didn't allow me to execute my sales on PTBI and the

Positives:
- Good resilience to big events beyond my control.
- Some really solid reads.
- Was quite sick during the month and didn't let it get to my trading. While I got a little lazy with reviews etc accordingly it was still good in general.
- Clearly when the opportunity presents itself I can nail a high conviction trade.

Negatives:
- Not enough focus on the grind, too much focus on nailing a big trade. Need to take profits quickly unless a super high conviction setup. I haven't improved on this from last month yet.
- Not controlling risk well enough. The only time to risk decent money is when it's a high conviction setup (say once a day max!). The rest of the time risk should be minimal.

Trading Review: 05-29-2015

Back Account: -$2538. Bit of a disappointing day. Obviously looking at the tickers traded I wasn't profitable on a single one of them. Was up quite decently on ESI, GENE, and there was a solid trade on HRTX after losing quite a bit in the morning, only to give a little back late day.

Positives:
- It was a slow day for me and despite this I did have some solid trade ideas.
- Narrowly missed the breakout on VBLT but didn't get too concerned about it.

Negatives:
- Literally same mistake on ESI as OHGI yesterday. Got too much size on too quick and didn't take profits quick enough.
- Too much home run mentality. Was in decent profits on GENE and ESI and didn't take any off (although I was offering just really need to be aggressive with that first target).

AVGO: Don't recall exactly what this trade was but obviously it was a small loss so not too worried.

ESI: Was looking for a squeeze after the nice breakout but got rejected. Really solid trade... But exactly the same as OHGI yesterday I didn't take profit quick enough and got too much size on.

GENE: The actual trade on this was breakeven but today was a loss of $600 because that's how much I was up unrealised. Again just wanting home run too much.

HRTX: Was too short biased on the gap up, lost a little more than I should have. Hindsight around 10:30 it was a clear long which is when I was stopping out... But I managed to catch the midday long and then lost a little money trying to dip buy it (impatiently) in the afternoon.

TBIO: Was looking for a the pop back to $3.50 as a long so that I could load up the short there because this stock met the requirements for shorting on day one. Overall happy to miss the short though because it didn't give the good RR pop that I wanted to get short.

VBLT: Very narrowly missed the breakout which was annoying because it was a nice play... But I didn't chase so I'm happy with that. Tried the long when it was holding support and didn't work.

Trading Review: 05-28-2015

Back Account: +$663. A better day overall and positive so a step in the right direction, relieves stress a little. Still lacked patience though which is mostly illustrated by my premarket trade in AVGO (description below), but for the most part better.
Had some really solid ideas in the premarket and to a certain extent didn't execute on them, but pretty happy with missing them because I was being patient and waiting for good prices/setups.

Mistakes:
- Lack of patience.
- Not enough conviction in midday ideas. Not one of them really worked.
- Think I jumped on the size bandwagon on OHGI a little too quick and on a less than ideal setup.

Positives:
- Better patience after correcting the mistake premarket.
- Didn't take some less than ideal setups.
- Wasn't too put off after midday slump.

AVGO: Exactly like CHTR the other day. Literally the same play except that AVGO reported earnings premarket which complicated it a little bit.
So I was looking at it after it came off it's 149 high and put in a limit order for 147.87, I then decided to cancel it and short at current price which was around 146. This illustrates a clear lack of patience and would have been a killer trade had I got the better price. Getting the better price would have also enabled holding for a bit longer.
Was waiting for $135 for the long, didn't quite get there so bought on higher high and sold into 140. Good trade.

BOX: Started long with a view to add on breakout. A good stopout and controlled risk so relatively happy with trade.

GENE: Am long overnight, would have sold half into the close but wasn't there - had put in a stop order and left. Will sell in premarket. Really solid patient entry on this one and will look forward to crushing it short tomorrow.

GPRO: Just short scalps against the high. Solid scalps but nothing major.

OHGI: Did a good job of taking some off at slightly below first target when the offer was holding, and then did a solid job of recognising the stuff and closing trade out before the loss became larger.
But overall I just had too much size in this setup, there was no reason to add where I did because it was unlikely to have another big run.
Didn't have shorts on this, but would have crushed it short with size :(
Hindsight I probably should have been in that second wave from 4.50 to 5.50. The fake breakdown was the tell.

ONTY: This basically had a big fake breakdown - just doesn't want to die!

PTBI: Bit too much size, but low risk and wasn't chasing.

YOKU: One of my better ideas from premarket, look for bounce on this, was hoping for $25 as dream price but didn't get there so bought on higher low. Unfortunately it had a complex pullback and I was stopped at the low (stop should have been 10% of ATR below low). Difficult one to catch from conventional trading, but solid idea.

Trading Review 05-27-2015

Back Account: -$2750. Stopped out for the day very early on. Really disappointing because there was a layup high conviction trade that I had been planning on taking with around 5000 shares and it moved >$2 a share (obviously wouldn't have caught all of that but still....). Great lesson sitting there watching my high conviction trade play out nicely while I'm stopped out for the day because of 2-3 stupid trades.
Actually had quite a decent day on main account, caught the high conviction short with 800 shares (was all I was able to borrow), and YOKU put options worked out quite nicely on the day. Still not enough to make up for this stupidity though.
So that makes 2 days in a row where I just haven't been quite up to it. For tomorrow (unless there are high conviction trades), I will really hone in and focus on the grind, keep losses tight and high accuracy. Really really important not to make it 3 bad days in a row.

KORS: Started fading this beast premarket. The general trade idea: That is, a big stock down a lot, once over vwap potential for decent bounce is an okay trade idea. Key is in the sizing and how its traded. Need to be starting into washes/levels and then adding to a winner. Not full size immediately with wide stops.
One thing that was wrong with the trade idea was trying to fade it so soon after the news... No rush to be in the trade, let the news settle a bit first.

Trading Review: 05-26-2015

Back Account: +$332. Bit of a disappointing day. Traded the morning really really well and then just a few execution errors that piled up, and then one slight misplay.
First mistake was accidentally setting a market order to sell on LL instead of a stop order - which resulted in 2 losing trades instead of one. But those things happen so I can't beat myself up about that too much - although 1200 is too much to lose on two trades anyway.
Second mistake, and this was a bigger one. ONTY was setting up a low risk long and so I used the tight risk to get some size on... But I got carried away and got 4x too much size on the trade.
And finally the third mistake was execution of the short parabolic on VBLT. I went in full size straight away instead of scaling into the parabolic - should have been a 5k+ trade.
All in all happy to come away with a positive day after some silly slipups. Focus tomorrow on getting the small things right - had some great trade ideas today, just needed to execute on them correctly. Withdrew account size down again, so that should help.

CHTR: Really nice textbook setup on fading the upmove of acquirer when the offer is in stock. Most of the trade played out in premarket, but on SS guidance looked for the 178-180 zone for short on the open, which worked perfectly. Covered most into 176 and the rest around 173. Great trade. Was looking at it for a high of day rejection, which worked but in the end didn't take it.

CTRP: Something that was on my short radar on the open but wanted a parabolic push to $90 first - what a short that would have been! Got long (nice and patiently) around 82 when it broke the downtrend and sold into 83. Was just a scalp but really solid trade. Was looking for a little more but it was clearly failing.

FXCM: This was a bit of a random trade, and I think I got a little lucky with it. But got long on the pullback from the first wave where risk was less than 10c and literally got sales near the top.

LL: Chased it a little on the move over 21.90 and as mentioned I slopped up entering in the stoploss. Wasn't quite that clean anyway, and didn't have as good entry as I should have.

ONTY: Already alluded to this. Don't need to go into it anymore.

PTBI: Another execution mistake not mentioned earlier. Basically just had the whole play here - can't chase it until it's broken out. Daily chart is strong so I have established a swing position and will add lower.

VBLT: Misplayed the initial parabolic by not scaling, and then missed the gimme short at resistance after it.

YOKU: Gap down killed my short idea, I wanted $31 to short. Missed the long after the double bottom, then tried to short the move off the bottom twice and actually did quite a good job of not losing money - it was very strong!

Weekly Review: 24th May

Back Account: +$2316. Bit of a disappointing week overall. Was quite sick coming in on Monday and didn't trade, then traded Tuesday which was a decent loss (-2581) which killed my motivation to trade on Wednesday (was still a little bit sick, but that's really just making excuses. Of course Wednesday was the day where there was plenty of opportunity in the low float space, so that probably would have been a decent day for me.
Then came in Thursday and crushed it (+7199), and gave some back Friday (-2302).

Things lacking for the week:
- Consistency. 1/3 days profitable simply isn't good enough.  I don't recall what it was on Tuesday, but Friday should have been a profitable day but I didn't trade well enough, psychologically (poor patience and discipline), and trade management (only small factor).
- Momentary lapses of discipline. Certain losses are much bigger than they should be. Eliminate this and my losing days will be smaller.
- Too much boredom trading. Need high conviction ideas!

Positives for the week:
- Have been quite sick and bounced back nicely.
- Another positive week.
- Crushed a day when there was plenty of opportunity.

Trading Review: 05-22-2015

Back Account: -$2302. Was a solid morning with no amazing trade ideas, but some solid grinding. Had a couple of trade ideas which worked but missed so did a good job of not being concerned about that (ISR, HPQ). After a while I think I started getting a little frustrated, particularly after missing the DGX parabolic, and then trading started to slip and get impatient etc.

Positives:
- Usually have trouble trading HOD rejections but traded the YOKU one perfectly.
- Some really solid grinding in the morning.

Negatives:
- Not covering enough into support.
- Not being responsive enough to a fake breakdown (opposite of HOD stuff effectively).
- Gave back too much on a successful trade.
- Target traded at end of day, which ultimately lead to giving a decent amount back.

AVEO: This was probably one of the better trade ideas of the day and I narrowly missed getting any size on the short unfortunately. Scale into morning spike risk on $3 then scale out accordingly. Great trade!

DGX: I don't recall exactly why, but I missed seeing this until the fade setup was gone. Would have been a really really solid trade, probably around >+1000. Tried the long once it settled down for an echo bounce but was too responsive to the price and didn't really get a good price so ended up stopping.

GPRO: Shorted into $55 on the open. Actually shorted 54.79ish because that's where it paused. Reality is because it's a pure play off a level and counter trend; I should have waited for the low risk short at 55. But overall happy.

HPQ: Reported earnings and $34 was a big level for breakout on daily. Got long premarket but was narrowly stopped. A real pain because it clearly worked very very well!

ISR: Another one that was stopped premarket. Was looking for the echo bounce on the open after the gap down. Worked perfectly but again narrowly stopped. This seems to be a trend in my premarket trades so something to look into more detail in.

MOMO: Really solid trade, was up quite decently on this at one point. Was long after it held the very key $17.50 area.

YOKU: Lost a bit of money shorting this on the way up - had stoploss a little too wide and added back some where I had taken it off as profit. This approach caused another loss bigger than it should have been when it broke the downtrend.
Ended up nailing the proper short on the high of day stuff/lower high and was net profitable but for whatever reason decided to get back into position(s) and take them off once had certain point of profit because I wanted a decent day. Poor trading.
The other mistake I made trading this, was that I still had 2/3s position when it came into the 30.30 support. I should have been down to 1/3 of position there.
The other thing, you can very clearly see the break of 30.30 but then hold of $30 and the reclaim. I should have been quite receptive to this.

UVXY Swing Long Strategy

Volatility price distribution is skewed. That is to say that the possible distribution of future prices is skewed to the upside, and there is "theoretically" a limit on how low volatility can go.

This doesn't just mean go long VIX futures, or go long VXX/UVXY because there is a downward drag if you go long these products over a decent length of time. The price naturally goes down, which is very apparent when you look at a longer term chart of VXX or UVXY. For chart purposes this makes it difficult to assess levels, so you have to look at the charts of the VIX index.

Looking at the VIX chart over the past 3 years you can see it has been relatively range bound, and fading moves around the 12 level has been a net profitable "trade idea". Again, because of the downward drag it isn't as simple of just going long volatility products. On net volatility hasn't changed over the past 3 years but clearly UVXY has been completely destroyed. While the 3 year chart looks horrible, the 1 year chart illustrates the validity of any long strategy.
3 Year VIX Index:

3 Year UVXY Chart:

1 Year VIX Index:

1 Year UVXY Chart:

Over the past 52 weeks volatility hasn't changed too much while UVXY has lost a whooping $160, or 80%.

The Strategy:

(1) Decide on a maximum position size. This is important because you want to be able to scale in over time and price. The maximum position size should be something you are prepared to take a reasonable drawdown on, thus shouldn't be enormous with respect to account size.

(2) Decide on a VIX range that you would like to trade on. As mentioned there has been an edge in fading moves on the VIX towards the 12 level, so that is a good starting point. You should be prepared to scale in over price, so there should be a range you identify. For example, I will scale in over the range 10-12 on the VIX.

(3) Sell weekly puts on the UVXY over the range. This is especially important because selling the puts ensures you get the appropriate scaling in over price, but it also helps improve your average cost by receiving a little credit. For example at the current VIX of 12 and UVXY of 40 you should sell UVXY weekly puts ranging from strike prices of 30-40. It may be necessary to go out a week or two to get the strike prices needed for all.

(4) Repeat this each week and you will begin to get filled on your UVXY shares. Adjust the strike prices you are selling puts at each week for the downward drag.

(5) As you get filled on your UVXY shares (via the puts) sell calls against the position. You want to spread the strike prices out to ensure that if there is a rally in the VIX you have a nice balance between credit received and capturing the rally in volatility. NOTE: Do not sell naked calls on UVXY this could potentially be a devastating move for your account because of the pricing skew of volatility. There is enormous tail risk to the upside in volatility.
Again, selling these calls will improve your average cost on UVXY and put you in a nice position of protecting against the downward drag.

(6) As you get closer to your maximum position size you want to be more aggressive with the strike price chosen for your short calls. The idea is you may get executed on some of your short calls on mini price oscillations, which will in turn allow you to buy back lower again (by selling puts), again improving average further.

(7) While your average is quite poor you also want to be aggressive with selling calls. And this is likely to be the case for most of the trade. However, as your average gets better spread out your short calls a little more; perhaps even moving out the duration to one month for a little bit. By moving out the duration you should be able to go a lot wider on your short strike (for example with UVXY currently around $40 you can sell a 38 day $60 strike for around $2-$4). Obviously if you got executed on that you would be rather happy!

(8) On net you are likely to be fighting the current for a large portion of this trade; which is part of the reason it is very important to look after your average. However, when the trade finally works it will happen very quickly and probably work out within a couple of days. Hopefully, when the time finally comes for the VIX to move upward you are in the wider strike price part of the trade and haven't capped upside too much by trying to look after average.

(9) A note about rolling the calls. You want to be aiming to improve your average by roughly 2.5% each week (which in this case with UVXY at 40ish equates to about $1 per share). A decent amount of edge can be lost if there is an inefficiency with rolling the calls (i.e. market moves while attempting to roll the calls). So the way to do it is to have a GTC order in to cover the calls at around 20c (which is an amount you obviously aren't too worried about when you consider that you're receiving about $1 per call each week), then when the order is filled to cover the call at 20c offer out the next one immediately and be aggressive to get fill (i.e. roughly enter at slightly worse than mid point) - you do not want to market to move while you are waiting for a fill.

EDIT: This system is still in the experimentation stage but it appears that a good way to ensure that some of the position is held for a decent part of the vix move is to sell weekly calls, one close and one far away (the improving average part of the game) and as the vix moves higher there is a decent chance you won't have been executed on the further away call (because it's only a week expiration), so when it expires and the vix is higher you take the opportunity to sell much further OTM calls with quite a wide duration.

EDIT (2): When aggressively trying to improve average by writing calls, having some short puts there to ensure you make money even if UVXY goes up can be a good idea. Just be careful not to over expose account of course.

Trading Review: 05-21-2015

Back Account: +$7198.

Main Account/Swing Trades: Obviously have been off, crook as a dog for the past week or so... So I've lost track of how my swing trades have done day to day which is kind of annoying. I closed my BABA long exposure the day before it started moving which is annoying but I had the structure messed up a little (not asymmetric enough) so happy enough with decision.
Was also about a -2k day on back account and a -200 day while sick, and one or two days prior to getting sick where I had been slack. Will just look at main account statement and fill in the net summary at the end of the month of something.

Today was a pretty solid day. Ultimately didn't trade to perfection because I didn't leave 1/5 of position on, on some of the trades (ISR, AVEO the main culprits). But overall only about 2k less than it could have been so not bad!
Clearly some poor trading though. The PTBI loss and the SHAK loss was way bigger than is acceptable!!!

AVEO: Did a really solid job of shorting the front side of the move on this beast. Risk was a bit too far wide on 1/2 of my initial position but aside from that it was all good.
Started looking at it as it accelerated and decided $3.50s over/under was a good place to risk to, so nailed entry around 3.39 and covered all into downmove.
Then nailed the (manipulated?) grind up over vwap short where it just completely dropped out like crazy and I covered all.
Last cover on the short at 3.39 was in the 3.00 range, and cover from 2.90s was in the 2.65s range... Simply holding those both would have yielded some seriously higher profit!

ISR: Gap up and short based off premarket highs. The initial move lower on the open got me on a lot of size too early. But added all the way to $3.80s and nailed (was down unrealised about 1.5k at one point though). Ideally if I was going to react so much to an initial downmove I should have started shorting premarket. Otherwise really solid!
Last cover was in the $2.70s.... Had I held this last 1/5 all day would have been another $1400...

NTAP: Looks really nice in hindsight but closed the trade in the .20s... I understand why I didn't like it, but if I didn't like it I shouldn't have entered the trade, otherwise I should have traded the plan.

PBMD: Had the exact right idea with this. But had to cut it premarket as I was stopped out. Spiked roughly 60c from initial entry so had the right idea.

PTBI: Didn't have hard stop in and got cained because I didn't notice the price slipping away.

SHAK: Position size was too large.

VIPS: Really solid trade long after the trend change. Added perfectly when could trail stop-loss.

Trading Review: 05-13-2015

Swing Trades: -$84. Established a swing position on BABA designed to profit on a move to $92+, and lose money below $85. A nice setup on daily (earnings gap up, breaking downtrend from gap up), but the intraday action today wasn't promising so will probably look to close it soon if it doesn't look very good. BABA is a short below $85 so should be able to hedge that by trading it rather than closing options position.

Back Account: +$1635. Have been really slack with posting recently, which is a bit disappointing - have to focus on keeping up commitment levels and keep in the habit. Today the loss on DD was too big (the first trade), so that was a poor trade, but aside from that good accuracy and good trading. Much better than a few of the prior days where I have let a few losses get away from me.
One observation from today (aside from DD) I am getting better at taking really low risk trades, and getting the solid entry... This is something I need to keep up because it allows for better risk-reward, and earlier management, and therefore a profitable trade. Additionally today I was pretty selective about my setups, I actually missed a bunch of trades that I really liked (like a $3 move in DHR), but didn't chase etc so really happy overall.

DD: Big gap down and $70 a big level on daily. I got this idea from SS, looking for a $70 flush and then a reclaim of $70.70 for a bounce. I established on the potential higher low and held all the way down until it held below $70 - not a good trade. Joined the short but narrowly missed management (need to be aggressive with first management position, replacing shares). Took it off for a slight profit once $69.50 held.

DHR: Really liked this for a short into $90.50 on the open but narrowly missed, such a shame! But oh well.... Got long when it was holding and gearing up, but closed when each bounce started failing (great close!) Very nearly joined the short but again narrowly missed! Good trading, happy to miss trades to be more selective with the trades I take.

GIGA: Obviously the trade of the day, and I wasn't actually sure if it was a good trade or just a chase. But risk was only 10c and ended up going about 50c.
Got long around $2.20 when it broke out and added at 2.20ish when I was pretty sure it wasn't just a high of day rejection. Sold 2/3s into move into 50c and held 1/3 until mid 70s. Flipped short but covered quick (not an ideal trade).

OHGI: More of less the exact same setup as PTIE yesterday. Massive move, but not low float and spikes usually fail. So I shorted around strength at $2.80 and covered mid 50s looking to reshort into a pop. Never got the opportunity but would have been a great short. Overall happy not to have chased weakness because you can't do that on day 1 - also happy with full covers rather than partial.
Will be a great short tomorrow!

YELP: Shorted as it held below $48 (key level on daily/hourly) covered most into downmove (good aggressive covering), and covered the rest on trendline break.