Highlighted Trades: 02/01/2024

Today was dominated by the longs - with more than 95% (!) of our positive returns coming from long positions. Our best trade of the day is no exception. We got into DOV around $152.93, and exited at $156.12, about 30 minutes before close. DOV not only hit our target exit, but kept going into close. We’ve been backtesting alternative algorithms, that try to leave positions a bit before technicals have turned bad. This trade actually works as an argument against that - even though technicals weren’t as good later in the trade’s life, the return kept increasing even after we exited.

As you can imagine on a day like today, our best short was fairly unimpressive. We made 0.32% here, and exited when the technical outlook turned against us. Ultimately, the tickers currently being watched just didn’t show many good long opportunities today (though with the market up intraday, that’s not necessarily a problem). One of the main goals of this algorithm is to have near-zero market beta, so in the long run, we want to see the same number of long and short positions. Exceptions like today are fine, but it’s definitely worth noting.

Our worst trade today was a long on QRVO, losing us 1.74%. Notably, our technical analysis is skewed here due to the massive wick on the opening candle. This might be something we need to look out for, refusing positions if the ticker recently had a highly unusual candle. We’re going to be doing some testing on this, because I’m expecting these incidents to yield faulty signals more often than they yield useful ones. This is similar to our new rule for the algorithm: not entering any positions near market open.

We entered 49 trades today: 35 long and 14 short. It was a very long-heavy day, but a successful one.

That’s all I have for you tonight - thank you for reading, and happy trading!