Weekly P&L: -15.8%
- Having more than one open position
- Taking on too much drawdown risk
Too much focus on potential valuation of securities. Not enough focus on trading edge which comes from trend following overlooked assets. Added drawdown risk metrics to increase visibility of the risk of blowing up.
Going forward, valuation techniques will only be used to determine if its preferable to hold a specific asset instead of USD as our base currency. These calculations are rough and hence only extremely safe and obviously undervalued securities should be held as a “base currency”.
Posted a new set of trading rules to make sure we continue to focus purely on our edge of trend following overlooked securities. Cutting all existing positions. Will restart trading following the rules.
Weekly P&L +6.8k: BIDU +2.6, DBK +6.2, ACX -6.4, crpyto +4.4.
- Working GTC limit orders below market without checking news announcements daily, guaranteed to get bad fills sooner or later doing this
Even with only 5 stocks on the watchlist, the daily process is becoming time consuming after considering that on each stock there’s probably only one good trade per year to be made. The plan for next week is to reverse the process. At the moment we study stocks individually looking for our specific trade patterns. Going forward we’re also going to create a system to detect stocks matching criteria relevant to each trade pattern. Over time we’ll identify which approach is the most profitable.
Weekly P&L -0.3k: +6.5k BIDU, -7k crpyto assets, futures trading +0.2k.
Despite facing some operational issues reducing position size we could take in BIDU, our strategy was sound and the stock is now trading at our buy price limit of $220. Looking to take BIDU off the table at $230 next week to free up capital for other high-alpha trades.
Our crypto strategy wasn’t quite segregated enough. There were originally two trades: first buy into crypto assets as a value investment during a liquidity crisis or price dip; second provide liquidity to the market during liquidity crisis with the aim of getting out within a week. After profiting from the liquidity crisis we decided to scale up our value investment but in hindsight probably should have been more patient and timed the entry a bit better.
Main reasons for holding EOS over ETH:
- EOS product is an infrastructure solution for future users of blockchain
- Given ICO was hot, potential for 100% upside again on breaking news (blockchain scheduled to go live in September)
We started the year with just under 100k set aside for trading. YTD profit is now 50k which after taking into account capital deposits/withdraws is a 48% total return. If you’d like to learn more about our strategy and how you can also profit, subscribe for updates!