I have not played this correction as well as I know I could. I tend to compound mistakes. I think this is how people blow up. I have enough risk management in place to prevent this from happening, but my performance, the scoreboard, clearly reflects my loose fundamental game play. In a very boring way, I run through highlight trades thus far this year at the bottom of this post.
I had to override Elroi today. I simply cannot stand idle and watch the algo be wrong. It does not have context built in, and a few other very key components that would make him more robust. The question becomes, is he broken? To be honest, I do not think he is. There simply need a few more variables in the code to avoid recurring pitfalls. I still really like the information the algorithm provides. I can see him trigger and get pinched and I know other traders are likely in the same position. It helps me get a sense of order flow. But it needs to be more robust and amorphous to market conditions.
Do not think that I aim to fail via broken robots that tip me off by being wrong. Or that I get excited about losing money on a bad trade. The process, however, the data one gathers from failure is incredibly informative. A specialist is someone who has made every mistake that can be made in a very narrow field of work. There are data points baked in that you will never learn unless you go out and do the work yourself. I am frozen in remember, thus I might as well write trading logic inside the mother ship. I enjoy the process.
My book is 75% long stocks, 3% February call options, 7% TZA, and 15% cash. That’s a decent look, in my humble opinion.
It was a great week to trade the market. Really I have enjoyed the whole year, although my book wouldn’t reflect it. I am -5% thus far on the year. To be honest, I am happy to be there. I have been rolling through earnings season like Wiley Coyote, drunk and shooting at any stock that moved. This gets kind of boring, but I figured I would share some highlights of the churning I have done year to date:
AAPL, OESX – guillotine
CREE – fake out
YGE – I bailed, not bad
FB – Frank Abagnale
TWTR – was tiny, bought yesterday’s close at 50.02, sold the early prints like a clown baby. Now I want more, slowly.
GOGO – capitulated Monday
Could be worse, could be better, but we are always moments away from another breakthrough at the Raul test laboratory.
Have a great weekend.
PPT, FTW
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Raul
Could you comment/blog about risk mgmt. I totally suck at it. Hence my current lousy positions I own. Any books or websites you recommend?
I’m pretty interested in risk management lately. I’d like to hear some more on that topic too.