September turned out to be a phenomenal month of swing trading for me and the members of the SharePlanner Splash Zone.
September was the best yet in 2017 – and that is saying something considering that every month so far has been profitable for me in the stock market, and the most profitable of the last two years.
A couple of things that really stand out though, is the lack of any follow-through on short setups, which is really quite amazing. I can get a small profit here, and another there, but in all, there is nothing to the short side, and that continues through October as I am writing this post.
Simply put, it is an appalling market for short traders .
Here’s the results and how they breakdown:
Let’s drill down a little further:
-
I was profitable on 16 out of 27 (60%) of my trades
-
14 out of 21 (67%) of my trades were profitable that were focused on bullish/long setups
-
2 out of 6 (33%) of my trades were profitable that were focused on bearish/short setups
-
3 out of 8 (38%) of my trades were profitable using exchange traded funds (ETFs)
-
13 out of 19 (68%) of my trades were profitable that were done with trading equities
Only one direction to trade
As I mentioned earlier, the short setups were appalling. There was one real sell-off on September 5th and it wasn’t even a full percent. SPX dropped 19 points, and at one point was down almost 30 points in all. But as always, the dip buyers come to the rescue, and bailed traders out of their bad trades.
Following the September 5th sell-off, it was clear sailing for the market, as nine of the next twelve trading sessions finished higher. The three sell-offs were marginal or better yet, “insignificant”.
So what worked for my swing-trading:
-
Home Improvement
-
Technology – Semis in particular
-
Chinese Stocks
-
Chemicals
RELATED: Patterns-to-Profits: A three hour training course, for FREE
Lowe’s (LOW) was one of my favorite trades. It wasn’t a thriller by any means, but it was easy to manage the profits on it, and each day it steadily rose higher. This was an ideal trade because once it peaked, it gave me an easy exit out of the trade.
Technology was much more volatile but much more profitable too. The big winner being Nvida (NVDA) with a 10.3% profit. I don’t expect every trade to work out in this manner, but when it does, making sure you raise the stops along the way and not getting lackadaisical and assuming that the profits will always be there. Because they won’t.
In fact immediately after closing my position in NVDA for a big profit, in gave back that entire price move.
Had I not been diligent on the risk management side of things, emotions would have been difficult to manage and a good trade would have been all for naught.
Chinese stocks – Alibaba (BABA) and Baidu (BIDU): the former was a big winner, and the latter was simply “okay”. But both were winners, and BABA, as it has done all year long, has been a very profitable trade for me. This time I managed to notch another 5% profit on this trade. BIDU has been a little more difficult to trade in 2017, and my profits were not that much, but still, I’ll take a winning trade over a losing trade any day of the week.
Finally, a new name, that I don’t believe I have ever traded before: Olin (OLN). Upon closing this stock out, there were 5.2% in profits. This had one major move on October 2nd, after getting in it on September 28th, but did absolutely nothing thereafter. After waiting about five days and waiting for it to take the next leg up, I closed my position out at my raised stop-loss price.
Once again, like the NVDA trade, raising the stop-loss on OLN along the way allowed for my profitable trades to be maximized as much as possible while insuring I would come out with the bulk of my profits.
What did not work for my swing-trading:
-
Shorting anything
-
Railroads
-
Biotech
I am beating a dead horse here by continuing to mention it (that’s a popular expression here in the USA, by the way), but shorting stocks continues to be an awful experiment. There were a few times throughout the course of the month, where it looked like the market might be ready to give way. I got into the trade, and while there were a couple of short plays that I made marginal gains on, overall, the short side did nothing for me.
Railroads – my gosh, I hate the railroads. It doesn’t mean I won’t trade them, but my personal feelings toward them is one of pure hatred. CSX (CSX) is a perfect example. Good set up initially, with the double bottom breakout, then it stops me out early on and ramps higher from there. In general, railroads always seem to have good setups, but once a breakout happens, they don’t tend to play nice on the technical side of things.
I feel better already just for writing about my disgust of rails!
Biotech stocks – I actually had a net profit on these, but out of the three trades I made, two of them were losers. I usually prefer IBB over XBI, but I did trade XBI once, because it had the better trade setup, but managed to get nothing out of it. IBB however, had a nice breakout of its bull flag, and I suspect there will be more opportunities to trade IBB this year and the year to come.
And then there were Consumer Cyclical Stocks
There was my short in Royal Caribbean Cruises (RCL) that didn’t fair very well, but then you had my trade in Netflix (NFLX) and Marriott Int’l (MAR) that performed quite well. Of course LOW, as mentioned before, performed to the tune of 4.6% in profits. The takeaway is that they were a mixed bag of stocks that I managed to profit well on, not because my trade accuracy was great, but because my risk management was superb and as I always say, risk management is the key to stock trading success.
Fighting Paranoia
This is something that can be difficult to manage in this raging and very bullish market. The stock market is going up day-by-day, and neither terrorism, Nuclear War, an inept Congress, or anything else for that matter, can put a dent in it.
Honestly it feels too good to be true and as a result, when you see the first sign of stocks heading lower, it is easy to get nervous about it, and start selling stocks or shorting them. Obviously, my trades to the short side weren’t that great, and when you look at my overall trading performance for the month, you wouldn’t even know that I had any difficulties trading the market. But the fact is, while my trade setups were solid from a risk/reward perspective, and didn’t allow for losses to pile up to any extent, there may have been too much of an eagerness to jump into the short side, only to be forced to pop right back out.
No trader is perfect.
Regardless of how long one has been trading for (for me I started trading when I was 11 years old), an honest look at one’s trading is always merited. It is when you don’t review your trades and where you might be steering wrong at, that you lose your edge and take on less than desirable habits that should have been nixed ages ago.
I don’t try to come across as self-deprecating, but if I believe that my trading success comes as a result of me being some kind of “market genius” or “guru” that has special insight that no one else can possibly possess, it will be the exact moment that I will fail as a trader. I will always be hard on myself, and my trades. When there is an area that I can improve upon, I will do exactly that.
Learn more about trading
If you’re interested in learning more about my trading methodologies and actually profiting off of them, I highly encourage you to do so, by becoming part of the SharePlanner Splash Zone. If nothing else, you’ll see me act as my own worst critic on my losing trades, and wonder how I could have made more on my winning trades. But all kidding aside, the Splash Zone is undoubtedly the place to be. There is a thriving community of traders that help and encourage each other continuously, and on a daily basis. Along with being part of the best collective group of traders on the web, you’ll also get all of my trades real-time via text, email, and in the chat room itself. Better yet, with each trade you’ll get my entry price, stop-loss, target, chart and rationale for each and every trade.
