More Weekly Chart Practices (DKS, NVDA, F, WBD, PLTR) and Minimum Stop Loss

Practiced on the weekly charts of 5 more stocks: DKS, NVDA, F, PLTR and AMZN. This time round, the results are not as outstanding.

Practice Records

DKS

WeekTradeQuantityEntryStop LossExitPercentage Profit
8 Mar 10Buy125.5222.0826.2822.09%
8 Nov 10Buy130.4627.6735.42177.78%
7 Feb 11Buy138.4735.4239.0719.67%
23 Apr 12Buy150.9946.847.65-79.71%
23 Dec 13Buy157.6254.0155-72.58%
14 Jul 14Sell144.6753.2344.432.80%
14 Nov 16Buy160.7654.3554.35-100.00%Stop loss was based on a recent low
15 May 17Sell145.7852.8927.75253.59%
11 Jan 21Buy164.8451.1466.8514.67%
5 Apr 21Buy181.3266.8592.375.88%
26 Jul 21Buy1104.9491.48119.43107.65%

NVDA

WeekTradeQuantityEntryStop LossExitPercentage Profit
15 Feb 10Buy14.4753.824.21-40.46%
28 Jun 10Sell12.6753.382.653.55%
3 Jan 11Buy13.9053.345.45273.45%
8 Aug 11Sell13.14.073.71-62.89%
3 Oct 11Sell13.07253.713.71-100.00%
16 Sep 13Buy14.0253.283.74-38.26%
30 Nov 15Buy18.0356.217.85-10.14%
21 Mar 16Buy18.61256.518.662.26%
16 May 16Buy110.38.6614.53257.93%
26 Sep 16Buy116.4114.5325.92505.85%
20 Mar 17Buy126.6323.792535.51312.95%Stop loss was based on a recent low, almost stopped out
17 Jul 17Buy141.67535.5147.7999.19%
8 Jan 18Buy155.145.1554-11.06%
19 Feb 18Buy162.75455.46-83.22%
27 Aug 18Buy168.402558.3159.68-86.43%
19 Nov 18Sell140.302562.4737.5812.28%
16 Dec 19Buy157.44549.4558.8617.70%
13 Jul 20Buy1106.80286.86127.5103.79%
9 Nov 20Buy1146.137123126.28-85.82%Stop loss is based on a recent low
15 Feb 21Buy1153.163125.86129.03-88.39%
16 Aug 21Buy1207.58178.23209.56.54%
18 Oct 21Buy1219.56195.55287.78284.13%Stop loss was based on a recent low
13 Jun 22Sell1160204140.3144.75%Almost stopped out
6 Mar 23Buy1239.13178.18416.49290.99%

Ford

WeekTradeQuantityEntryStop LossExitPercentage Profit
1 Mar 10Buy111.9310.4112.3426.97%
11 Oct 10Buy113.7711.6416.6132.86%
18 Jul 11Sell112.9514.1911.3133.06%
21 Nov 11Sell110.0211.311.3-100.00%
2 Jul 12Sell19.4110.889.52-7.48%
24 Dec 12Buy111.9110.6512.7667.46%
8 Jul 13Buy116.7914.3716.41-15.70%
21 Oct 13Buy117.616.2116.53-76.98%
30 Jun 14Buy117.3416.0516.74-46.51%
15 May 17Sell110.8511.811.54-72.63%
8 Jan 18Buy113.2712.2812.41-86.87%
23 Jul 18Sell110.4612.059.4464.15%
10 Dec 18Sell18.759.858.85-9.09%
6 Jul 20Sell15.757.746.87-56.28%Stop loss was based on a recent high
16 Nov 20Buy18.657.338.789.85%
18 Jan 21Buy110.258.7811.72100.00%
24 May 21Buy113.5211.7212.8-40.00%
3 Jan 22Buy121.5417.0720.1-32.21%
4 Jul 22Sell110.8514.1713.85-90.36%
30 Oct 23Sell19.8512.710.64-27.72%

WBD

WeekTradeQuantityEntryStop LossExitPercentage Profit
22 Feb 10Buy116.60614.149217.1722.96%Stop loss was based on a recent low
31 Dec 12Buy133.058628.3238.67118.42%
12 May 14Sell136.869942.4840.1-57.58%
10 Nov 14Sell131.9338.935.73-54.52%
11 Sep 17Sell120.6224.6819.3232.02%
4 Jan 21Buy130.4326.7250.12530.73%
13 Sep 21Sell126.0129.7326.99-26.34%
13 Jun 22Sell114.7720.0815.13-6.78%
7 Nov 22Sell110.1513.3611.91-54.83%

PLTR

WeekTradeQuantityEntryStop LossExitPercentage Profit
10 Jan 22Sell116.00520.1514.2642.10%
22 Aug 22Sell18.3211.018.43-4.09%
17 Jul 23Buy117.3111.3914.94-40.03%

Profitability (Weekly vs Daily)

For weekly charts, the risk is 7.5% risk per trade. For daily chart, the risk is 5% per trade. Both use a starting balance of $100,000.

For daily charts, lot size is reduced by 0.1 unit if the previous two trades are losers and exit in less than 11 days. If the previous trade is a winner, lot size is increased by 0.1 unit, subject to a maximum of 1 unit.

Position sizing for weekly charts is similar, except that number of days to exit is not taken into consideration.

Entry strategy for daily charts:

  • NVDA only used the EMA15 indicator
  • PLTR only used the EMA15 indicator and a sector filter
  • DKS used a sector filter and the EMA15, EMA50, EMA150 filter
  • F and WBD only used the EMA15, EMA50, EMA150 filter

For weekly charts, only EMA10 and EMA30 are used so as to catch a trend earlier. I also focused on looking for Stage 2 and Stage 4 entries only.

Balance and Max DDDKSNVDAFWBDPLTR
Daily$98,785.93, -19.37%$444,114.22, -19.12%$362,798.17, -18.77%$265,298.53, -21.95%$101,549.77, -25.04%
Weekly$132,393.47, -17.61%$265,238.29, -15.96%$92,398.78, -25.11%$136,337.33, -8.23%$99,753.21, -3.30%

Analysis

The results are quite mixed.

In general, trading on the weekly chart reduced the maximum drawdown quite significantly, except for Ford (F).

The results for Ford was most surprising. While it was the second most profitable stock on the daily chart, I ended with a loss when trading the weekly chart, with a higher maximum drawdown.

Was the weekly chart so different from the daily chart for F? I can’t say for sure. The image below shows the weekly chart for Ford from 2010 to end 2023. It does seem to trend in a broad channel, especially from 2014 to end 2019 and from mid 2022 to end 2023. Hence, a daily chart may be more suitable for capturing the movements within the channel.

Another possible reason for the poor performance could be that I was less stringent with my entry. I practiced on NVDA (weekly) before practicing on Ford. For NVDA, the performance on the weekly chart pales in comparison to the performance on the daily chart.

On the daily chart, I bagged a big 1837.25% winner. However, I missed this trade on the weekly chart (which would have resulted in a much smaller 273.45% winner).

The reason I missed this trade is because the moving averages had just crossed about 7 weeks ago and I was waiting for more confirmation. On hindsight, I could have taken into account the consecutive bullish trend bars before bar A and decided that it is ok to buy above bar A.

Due to missing out this trend, I started to be less strict with my entry, trying to catch a trend early so that I do not miss an entry. That contributed to the poor results for Ford in some ways. When it came to WBD, I decided to be a lot more stringent, which helped to reduce the maximum drawdown significantly.

Psychology really matters a lot in trading. I should constantly remind myself of the motto:

It’s not that most profitable trades have a good setup, but that most setups that are good end up being profitable trades.

Daily Vs Weekly

It is hard to decide whether I should switch to the weekly charts. Practicing on the weekly chart is much faster than on the daily chart, and I like that there are fewer trades, which helps to reduce the transaction costs. In addition, if I trade weekly charts in real life, I only need to work on the weekends to identify the trades. In contrast, if I trade on the daily charts, I need to scan for trades every day.

However, missing a good trade on a weekly chart is more costly, as good trades are fewer on a weekly chart (since there are less bars on a weekly chart). In addition, I will likely miss a lot of good trends that happen fast. For instance, a stock may move up significantly in one week, and be too extended by the end of the week to enter. Also, as the stop loss is further on a weekly chart, the profits from a winning trade may be significantly lower on the weekly chart. A good example is the NVDA trade mentioned above. On a daily chart, the percentage profit is 1837.25%; on a daily chart, it is only 273.45%.

All in all, I think sticking to a daily chart makes more sense, but I need to be more stringent in my entry to reduce the drawdown. I expect that there should be more Stage 2 and 4 trades on a daily chart, so I can afford to be more picky?

Sidenote

One issue with my current exit strategy is that sometimes I get hit with a 100% loss because the stop loss is very close to the entry price. Perhaps I should consider setting a minimum initial stop loss? However, that may also reduce the chance of me getting a massive winner.


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