Highlighted Trades - 05/02/2024
Today was a bad day for our system, full stop. We saw 5 trades across 4 unique tickers - all long positions. Of these trades, all performed negatively. We’re at about a 32% success rate in backtests, so across a sample size of only 5, zero successes isn’t particularly rare. Regardless, it’s unfortunate that this is all we have to report today. Let’s examine some of these trades.
Our biggest loser of the day was this long position on AAL. We took a loss of 0.34% here. That’s not a big loss, but I don’t think it was entirely avoidable. There’s only 1 real red flag to this trade, and it’s one that’s difficult to judge when trading live. The stock price is too far above the Tenkan-Sen line. So if you’re taking this trade, you’re betting on the price continuing to climb even higher. That’s not a deal breaker in and of itself, especially with momentum this good, but if you took this, you took it knowing it was a high risk/high reward play. And when the bullish momentum didn’t continue, you probably got out long before our stop loss level.
I think it was hard to say no to this trade entirely, but if you took it, you likely knew what you were getting into, and it’s fairly unlikely you took the full 0.34% loss.
The only other trade I want to discuss today is this long on SYF, as another loser that, while easy to mitigate, was difficult to avoid entirely. This one lost us 0.17%. All of the signs are present going into this trade. The cross is fairly strong, with both TK-lines sloping upwards at our time of entry. In addition, the MACD is great, the lagging line is cooperative, and the momentum is extremely bullish. This is, unfortunately, just a trade that didn’t work out.
There was, however, an opportunity to reduce losses. The bullish momentum visibly dies off a few candles before we get stopped out. In this way, if you took this trade, you had an opportunity to lock in some profits, or at least reduce losses. But that comes down to personal trading preference. At the end of the day, our system took the loss here.
Results are unfortunate today, and overall have been pretty sub-par this week. We’ll go more in-depth on these during our weekly review this weekend, but if the system doesn’t show a good turnaround, we’ll be moving it back to a private server, and publicly replacing it with one of our other in-progress algorithms.
That’s all I have for you tonight. Thank you for reading - and happy trading!
