March Review – Good News and Bad News

March 31st, 2007

After last month, I was ready to be really selective and try to improve my win rate. I started off with a 5R trade on the first trade I made in March which is always a nice way to start the month. I was being extremely selective through the first half of the month – only 3 trades through the 14th. I just didn’t see many setups that I liked.

I was trading so infrequently that I started exploring the possibility of trading another system alongside my dummy/fib trading. I started incorporating some breakout trading ala the HighChartPatterns group. I dedicated a portion of my trading screens to this style of trading and formatted the charts with a different background color so I could logically keep them separate.

What I didn’t realize at the time was how this new system (new to me, that is) would thoroughly put my dummy/fib trading to shame this month. Using StockTickr really helps keep things straight when you trade different systems or you just want to track different aspects of your trading. (See Richard Todd’s March review for another good example.) I tagged this new system with “momentum” and my dummy/fib trades with “Dummy Trade”. I also tag my dummy plays with either “30Min Bars” or “15Min Bars” depending on which timeframe the trade comes from. Note that the tags “long” and “short” span both systems. The link on the tag takes you to the StockTickr Chart Review for those trades so you can see my entry and exits.

Performance by Tag

Tag Total R Win % Expectancy Trades
momentum 18.05 60.00 0.90 20
long 15.59 52.17 0.68 23
30Min Bars 5.00 33.33 1.67 3
short -0.38 22.22 -0.04 9
Dummy Trade -2.84 16.67 -0.24 12
15Min Bars -7.84 11.11 -0.87 9

As you can see, this new system trounced my old system this month. So the good news is that I had my best month ever in terms of R (15.21R). My profit was right at my best ever since my position size is a little lower with the new system. The bad news is my dummy trading yielded -2.84R – and that was with a 5R cushion at the beginning of the month! Here’s a view of my StockTickr calendar filtered on the new system and then filtered on my dummy/fib trading.

Of course, I’m not ready to give up on my dummy/fib trading. I think part of the reason for the performance decline is the fact that I was distracted more than normal by trading a new system. There were many days where I would make great trades in the breakout system very early in the day and then when I settled back into dummy/fib trading I would feel like I could take more risks since I was already up on the day. I’m sure this led me to trade at least a couple bad setups. Also, judging by the fact that all our favorite fib traders seem to be exploring different timeframes, it would seem that this is not the ideal market for fib setups. Perhaps I’m wrong about that.

I’m certainly buoyed by my results, though. We’ll see how April turns out.

3 Comments

  1. Richard Said,

    March 31, 2007 @ 11:40 am

    I think all the pure dummy traders that talk about their trades have been hurting. Perhaps, in times of greater volatility, trading against a tiny candle is not the best idea.

  2. estocastica Said,

    April 1, 2007 @ 1:45 pm

    Excellent job this month. I think it’s great that you’re exploring other techniques to supplement your trading. Best of luck to you for April!

  3. Anonymous Said,

    April 22, 2007 @ 4:30 pm

    How Much Money Do I Need To Retire?…

    How Much Money Do I Need To Retire?
    That’s the golden question. I want $313 million (my birthday in millions).Really though, how much do you need? Financial ‘advisers’ say you probably need around $2 million so that you can just live…

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