For the last few weeks, I've been teaching my oldest son how to mow the yard so that I can officially retire from lawn care. During this time, it occurred to me just how much his learning to operate the mower and cut the grass were similar to new traders developing a successful system for trading stocks. With several acres to mow, my son doesn't get start with a push mower then graduate to a small riding lawn mower, but instead has to learn on a commercial size mower. To get him started we practiced a few rounds with the blades not engaged so he could get a feel for speed and turning.
Once he was comfortable, I turned him loose and watched so I could help out if he had any questions. When the blades were engaged his demeanor changed, probably similar to new traders placing their first couple of trades. He wasn't sure of his decision making for fear of making too big of a mistake. Many times he would be looking at me for direction instead of following his cut line. In doing so, he would miss big spots of grass and have to recircle to make a second pass. However, this week was much better and within another week, I'm sure my retirement papers will be filed.
My point to this story is that his lawn mowing is really no different then traders, especially those new to trading, trying to figure out what to do. When you are unsure of your actions you search for direction either through books or mentors. As each week, month , and year pass you slowly start developing what is your trading style and stop needing to refer back to books and others for direction. In essence, you know longer need to recircle for a second pass because you now know what to do.
+1.09% MTD | +17.99% YTD
The month of June saw quite a bit of trading activity, mostly in the form of raising cash levels. From an open positions standpoint the 5 long positions are BABA, MTZ, IPGP, HDSN, and EMKR. BABA is the largest position at around 12% and also the best performer at +30% since the initial open date on 4/10/2017. Both HDSN and IPGP are both up near 20% since their initial open dates while MTZ and EMKR are up a modest amount. Below are the charts from yesterday's observation post.
Recently Closed Trades
The recent jump is mostly contributed to CTRL +28%, CEVA +30%, UCTT +40%, OLED +40%, and CAMT +28%. On the downside were INTT -14%, LPTH -9%, and FORM -3%. For a complete list you can see the performance page and click the trade log button at the bottom of the page. Many of the better trades were displaying the alert indicator on the charts a few days before June 9th. When this indicator appears, you have the option to tighten your stops or liquidate the position. The majority of the winners above began reversing from up to down on the day, so the decision was made to close them. Below are a few of their charts for reference.
As of today 283 stocks are passing the main screen which is a +10 jump from yesterday. Even with today's move it still appears that many of the stronger names over the last few months may take their time forming new bases. In the meantime, some rotation appears to be strengthening other sectors. Time will tell if the rotation is short lived or has legs to bring about strong moves in new names. Staying focused on finding solid weekly pattern setups tends to keep the car out of the ditch. Here's a few from the watchlist.