Performance: August 2023 (-1.14%) - Slow but Steady
I think I did a really good job this month. However, my P/L for the month was slightly negative. The ability to not trade in this not so favorable environment has been a big edge for me. I was able to avoid a lot of the false breakouts, but there haven’t been too many breakout setups to begin with so it sort of made my job a bit easier.
There is a revelation that I wanted to note down. Because I have a pretty small account (~$6K), I am able to trade nano, micro, and small-cap stock with relative ease with illiquidity not being an issue. This, for me and my tiny account, is a BIG edge as these small-cap and below stocks move more violently than larger-cap stocks, making the chance of a big move higher.
Normally, I have a rule in place that when SPY 0.00%↑, 10SMA is greater than 20SMA, my risk per trade should be increased, and when the 10SMA is less than 20SMA, risk per trade should be decreased. I also look at other factors like if I am seeing breakout setups appear more frequently within the days leading up to a 10/20SMA cross then it could be a sign to increase risk.
There are going to be exceptions to this rule. Even when the market is in a downtrend, I believe it can still be optimal to trade breakouts for:
Nano, micro, and small-cap stocks
Biotech stocks
Other than these 2 exceptions, I do not trade breakouts in the current environment. Even with these exceptions, I have minimal risk per trade. I realized this as there were 2 missed opportunities within this month that could have added to my overall PnL.
GNS - GNS 0.00%↑
With an ADR% of 31% and a market cap of $46M, this thing did not care where the overall market was heading. These are the types of fast-moving stocks you want to be in. Now it is harder said than done to enter and time this with a good entry but because I am only trading a few hundred shares of most stocks, this should have definitely been on my radar.
IZM - IZM 0.00%↑
With an ADR% of 13% and a market cap of $100M , I actually had this one on my watchlist as I was about to enter but was too slow. My hesitation to enter hindered my execution of this setup.
Winning Trade of the Month:
I saw in premarket, that NKLA was showing volume after a big headline came out on Aug 1st. I traded pre-market knowing that this news has to push the price up and considering that every news event this ticker gets tends to show a burst in price and further momentum! I feel like the stars sort of aligned in the sense of learning from my past mistakes!
I unfortunately got stopped out for a small profit (the initial trade was actually really good) but I feel like I should have re-entered! Either way, this was one of my only wins for the month as there were very few opportunities/ setups.
Stats from Broker:
Benchmark Return Comparison:
Personal Trade Log Stats:
* Note: Ending balance amount is off by a few dollars (pretty sure due to mistyping an entry or exit)
On to the next month,
-F4VS