This was another great week of trading for the swing trading virtual portfolio. Thank you everyone for some great suggestions in the comments.
It is pretty interesting this week to notice that some of the profits and losses where not very significant in terms of Rs (or in terms of percentage in your virtual portfolio), despite significant moves in the underlying. This is because our sizes were very small as we entered the positions with very wide stops. Those happened in financials mostly where volatility was high all week.
For example, on our last COF trade, we bought puts when the stock was at $19.05 and rode it all the way to $14. That’s a 26% move in the stock. But we only booked a 0.76R profit in he virtual portfolio, or 2.28%. That’s because our stop was at $23.
On the other side, the loss on WFC was just a little bit more than 1R as we had a wide stop on this one as well.
This is a very interesting side of the strategy, as we modify the position size depending on volatility, and distance to our stop. This way we avoid big losses on stocks that can move significantly overnight. It is all about risk management.
To learn more about the swing trading virtual portfolio (strategy, membership etc.), please click here
– Optrader
