Ticker: WBD
| Date | Trade | Entry | Stop Loss | Exit | Percentage Profit | Days To Exit | |
| 23 Mar 10 | Buy | 17.0556 | 16.43 | 18.67 | 258.06% | 32 | |
| 15 Sep 10 | Buy | 20.792 | 19.9 | 22.03 | 138.79% | 13 | |
| 12 Jan 12 | Buy | 22.0991 | 20.82 | 22.1513 | 4.08% | 12 | |
| 14 Mar 12 | Buy | 24.7306 | 23.52 | 25.42 | 56.95% | 19 | |
| 27 Apr 12 | Buy | 27.4757 | 26.16 | 27.36 | -8.79% | 4th pullback | 6 |
| 27 Aug 12 | Buy | 27.494 | 26.66 | 29.77 | 272.90% | 22 | |
| 28 Sep 12 | Buy | 30.5701 | 29.77 | 30.62 | 6.24% | 8 | |
| 15 Oct 12 | Buy | 31.3264 | 30.4088 | 30.98 | -37.75% | Stop loss was based on a recent low | 5 |
| 21 Nov 12 | Buy | 31.4388 | 29.6014 | 29.73 | -93.00% | Stop loss was based on a recent low, broke rule as this is the 4th pullback for the uptrend | 3 |
| 29 Nov 12 | Buy | 30.2737 | 29.13 | 31.68 | 122.96% | 20 | |
| 2 Jan 13 | Buy | 33.2345 | 31.4052 | 35.0792 | 100.84% | Entry and exit bars are both gaps | 31 |
| 28 Feb 13 | Buy | 37.6064 | 35.17 | 39.1467 | 63.22% | 13 | |
| 25 Mar 13 | Buy | 40.6825 | 38.6663 | 39.65 | -51.21% | Stop loss was based on a recent low, broke rule as this is the 4th pullback for the uptrend | 7 |
| 11 Apr 13 | Buy | 41.2395 | 39.03 | 40.25 | -44.78% | 5th pullback | 5 |
| 27 Sep 13 | Buy | 43.028 | 40.09 | 41.31 | -58.48% | 6 | |
| 1 Nov 13 | Buy | 45.6289 | 43.23 | 43.42 | -92.08% | 5 | |
| 7 May 14 | Sell | 37.5985 | 39.7956 | 37.73 | -5.99% | Stop loss was based on a recent high | 9 |
| 16 Dec 14 | Sell | 32.59 | 34.69 | 34.68 | -99.52% | 3 | |
| 6 Jan 15 | Sell | 32.84 | 35.74 | 30.15 | 92.76% | 12 | |
| 2 Feb 15 | Sell | 28.84 | 30.36 | 30.29 | -95.39% | 4th pullback | 3 |
| 21 Aug 15 | Sell | 26.92 | 29.43 | 27.32 | -15.94% | 6 | |
| 30 Sep 15 | Sell | 25.47 | 28.44 | 28.23 | -92.93% | 6 | |
| 27 Jun 16 | Sell | 24.25 | 26.52 | 25.33 | -47.58% | 5 | |
| 9 Sep 16 | Sell | 24.83 | 25.91 | 24.8 | 2.78% | 10 | |
| 1 Aug 17 | Sell | 24.14 | 27.59 | 22.73 | 40.87% | 19 | |
| 5 Sep 17 | Sell | 22.12 | 22.73 | 21.6 | 85.25% | 9 | |
| 10 Oct 17 | Sell | 20.68 | 21.78 | 19.9 | 70.91% | 8 | |
| 3 Nov 17 | Sell | 16.95 | 19.49 | 17.39 | -17.32% | 4th pullback | 11 |
| 11 Jan 18 | Buy | 23.17 | 21.13 | 25.5 | 114.22% | Stop loss is bar low | 13 |
| 27 Feb 18 | Buy | 25.35 | 23.7 | 23.7 | -100.00% | 7 | |
| 6 Aug 18 | Buy | 27.26 | 25.73 | 25.91 | -88.24% | 2 | |
| 29 Nov 18 | Buy | 31.48 | 29.78 | 29.93 | -91.18% | Anticipate a cross which failed | 3 |
| 11 Apr 19 | Buy | 31.1 | 27.87 | 29.65 | -44.89% | Anticipate a triple cross that failed | 7 |
| 16 Jul 19 | Buy | 32.8 | 31.14 | 31.5 | -78.31% | 3 | |
| 19 Nov 19 | Buy | 31 | 28.33 | 32.04 | 38.95% | 10 | |
| 24 Dec 20 | Buy | 28.56 | 27.82 | 70.01 | 5601.35% | Stop loss was based on a recent low | 60 |
| 21 Sep 21 | Sell | 25.45 | 27.22 | 26.45 | -56.50% | 5 | |
| 28 Oct 21 | Sell | 23.54 | 25.97 | 24.76 | -50.21% | 4 | |
| 31 Mar 22 | Sell | 25.08 | 27.66 | 26.01 | -36.05% | 8 | |
| 9 May 22 | Sell | 17.5 | 19.95 | 18.38 | -35.92% | 15 | |
| 10 Jun 22 | Sell | 15.37 | 17.87 | 14.68 | 27.60% | 4th pullback | 12 |
| 16 Feb 23 | Buy | 15.42 | 14.02 | 14.76 | -47.14% | Moving averages not in the correct order | 14 |
| 4 May 23 | Sell | 12.43 | 13.73 | 13.21 | -60.00% | Entry bar is a gap down | 3 |
| 6 Sep 23 | Sell | 11.29 | 12.83 | 11.96 | -43.51% | 4 |
Profitability
Today’s results are mixed. While the practice session is overall profitable, the profit was driven by one massively profitable trade. This trade (24 Dec 20) resulted in a 56x profit, and is likely due to the COVID boom for some entertainment stocks.
Considering all trades, the final balance using Strategy 4 for position sizing is $261875.5 (starting balance = $100,000, 5% risk per trade); the maximum drawdown is -21.95%.
This drawdown is rather massive, and above my maximum acceptable drawdown of 20%.
If we do not consider the COVID trade, the final balance is $110,780.15, with a maximum drawdown of -26.45%.
Analysis
WBD is a difficult stock to categorize. The stock trends very well at times, such as during the following periods
- 1 Jan 10 to end Apr 10
- 1 Jan 12 to end May 13
- 1 Aug 17 to end Oct 17
- 1 Nov 20 to mid Mar 21
- mid Apr 22 to end Jun 22
Previously, I hypothesized that stocks need high volume in order to trend. However, that does not seem to be the case for WBD. Prior to Apr 22, its average volume was below 10 million on most days. However, it trends very well during certain periods even with relatively low volume.
Beyond these trending periods though, the stock is rather choppy. That may be partially due to its low volume.
Choppy markets and FOMO
Overall, I think I did rather well to not get too badly ‘hurt’ during the choppy periods for today’s practice session.
Now, I focus more on trying to find Stage 2 and Stage 4 trades. To prevent FOMO, I also try to highlight all the bad trades that I ‘escaped’ because I was disciplined not to take them due to FOMO.
Each time I see a trade that seems ok, but decided not to take it, and the trade ends up being a loser, I tell myself 逃过一劫, which means I escaped a calamity. The main reason for my FOMO is I do not want to miss a good trade. Now, I am trying to convince myself that missing a good trade is worth it if it helps me miss many losers.
True, I may miss a trade that ends up with a 200% profit, but as a result of being stricter, I will likely also miss 8 trades that end up with an average loss of 50%, especially in a choppy market.
An example is my performance for SWN from 3 Jun 2011 to 20 Jul 2015. Although the last trade resulted in a 220.93% profit, the prior accumulated losses resulted in a net loss of 570%.
Adding in the commission saved, missing that one good trade may be well worth it. In addition, a good trend will likely have more than one entry point. Hence, missing the first trade, I can still take the second and third trades.
I should try to take trades only when either the environment looks very good (i.e., moving averages in the correct order and sloping in the correct direction) or the setup looks very good and the environment is not too choppy.
Mistakes
I made a couple of consistent mistakes for the practice session today:
- Entering a trend after the 3rd pullback (27 Apr 12, 21 Nov 12, 25 Mar 13, 11 Apr 13, 2 Feb 15, 3 Nov 17, 10 Jun 22)
- Trying to anticipate and entering before a triple cross (i.e., three moving averages cross at the same point) (29 Nov 18, 11 Apr 19). A better trade is to wait for the cross to occur and enter upon the first pullback.
All in all, entering a trend after the 3rd pullback resulted in a 283% loss.
Entering prior to the forming of a cross resulted in a 136% loss.
I think entering prior to a cross makes more sense as waiting for a cross to form can lead to missing the first entry, and a subsequent entry may occur too late to capitalize on the trend.
Entering after the 3rd pullback, on the other hand, makes less sense. The potential for profits is greatly reduced by the 4th pullback. However, the difficulty is in defining a pullback. This can be ambiguous at times.
Sidenote
Had an epiphany. It is not about finding the best parameters for your exit, entry, indicators etc. It’s about getting the best at using those parameters you selected. For instance, regardless of what parameters you use for your stop loss indicator, you are going to be stopped out at a loss for some trades that go on to be profitable. Perhaps, the key is to get better at filtering out such trades. There is no point jumping from one indicator to another, one set of parameters to another. Instead, aim to become an expert at the parameters and indicators you choose.
Moving Forward
Am going to try a high profile stock next – AMZN.
Also, I have yet to really explore how to trade using CFDs. I have a demo account with IG, but the commission for CFDs for shares is too high. I would like to trade CFDs for forex, indices, and even commodities or bitcoins, but data is hard to find. I need to practice on these data to solidify my ‘strategy’.
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