Deals of the Week: January 8-12, 2024

This week I started shorting WGMI and going long QS, TEAM, AMD, DYN and TANK. These basically used up all my non-margin buying power. As I mentioned in an article Position sizing discussion on the Canadian version of SwingTradeBot, I don't like the overnight deposit. But after starting a few trades at the beginning of the week, I quickly found myself Need to alleviate —Later Tuesday, my agency sent me a message I have exceeded my overnight buying power ( T-rule violation). So I have to select some stocks to sell or the brokerage firm will do it for me.

At that time my account was up 9.6% year to date, most of which was unrealized gains. So I was happy to get some profits off the table and decided to sell half of a few of my positions.

AMD and the team It's been going well since last week. Somehow, they trade in lockstep – they have very similar setups (retracement below the 20-day EMA, then back up there), and both move back to highs from before the decline. Here is the AMD chart:

One benefit of these two settings is that They set very tight stops on high-priced stocks. Given My Position Sizing Method (Risk Percent Model) This gives me the opportunity to invest a lot of money while still risking only the 1% of equity I normally hold – the tighter the stop, the more shares I can buy. In the case of AMD, I entered the position above the January 4th candle (and the 20-day EMA) at $138.34, with a stop below that candle at $133.75. Therefore, my initial risk (1R) is $4.59 (AMD's average true range is 4.90 – the ~1 ATR stop is about the tightest I've ever used). I sold half of my shares at $149.21, so AMD's stock price rose 7.85% ($10.87), and my profit was 2.36x my initial risk (2.36R). It has fallen back a bit since I sold, and the other half of my holdings are currently up 5.94%.

TEAM is very similar and I currently hold the remaining shares for a 5.22% gain.

wGMI Another carryover from last week is The most frustrating trades of the week! As I mentioned last week, I use WGMI as a way to play off the parabolic moves of Bitcoin miners. I shorted MARA the last week of December, thinking I'd try my luck and get back on the well on what I thought was a dead cat bounce. WGMI is down 17% this week, but unfortunately it took a crazy road to get there, which shocks me. I got tired of haggling on No. 10 and closed the trade with a loss of 0.22R. Thankfully, I did just that, because the next morning, news of the Bitcoin ETF approval caused Bitcoin to gap up. This gap would put me out with a loss of about 1.3R. But frustratingly, miners eventually broke after gapping higher — a typical reaction to sell news.

When the market opened I saw the gap but I had to leave to see a doctor. So I didn’t see the action until after the big slide happened. In hindsight, I should have placed a short sell order below the previous day's candle as I suspected we might have a “gap and crap”. Oh well! I hate it when it happens – I have the right idea, but the price action doesn't cooperate. But I did take comfort in the fact that I was in the right position and on the right side (short side).

I made a few other trades this week with mixed overall results:

It ended up being a “boring” week. I had a quick 5% gain for the week through Tuesday, but after the pullback, and especially Thursday's intraday selloff, I'm only up 1.2% and 5.39% so far.

PS: There probably won't be any other posts until the first week of February as I'll be on vacation in Australia. I'm not sure if I'll be doing a lot of trading, although I did get some orders on Tuesday.