Post #52: My 2018 results

I had a very disappointing 2018, my entire portfolio suffered a -19% loss. My stock picking only had 33% success rate, picking only 9 winners out of the 27 trades I took last year. Though I managed to keep my risk percentage within my limit, my poor stock picking numbers really hurt my portfolio's entire performance. 

I forced some of my trades in a downhill market; and the market taught me a hard lesson. My strategy will not work on a down-trending market, I actually knew that, but still I tried to enter positions I thought are feasible. I knew I should listen to the market, but I still took some risk and I paid for it with my money. A different kind of market needs a different kind of approach, that's my main takeaway from this lesson. I cannot be a momentum trader in a market for swing traders. 

This year, 2019, the PSE index started the year ranging between 7400 and 7600; a breakout of the range might show the direction of the market. I like the fact that we seem to be independent of what's going on with the world markets right now. Our market seems to be shaping it's own direction. It is exciting to see where this is heading.

Losing gives us opportunities to learn and evaluate our selves. I will consider my 2018 draw-down as just another lesson learned. Trading for me is a long game, and a year of negative return will not deter me but will instead fire me up to learn more. We all still have our best years ahead of us. Keep grinding , keep learning. 

Post 45: Lessons from my top 5 trades last year (2017)

They say that we can learn a lot of lessons reviewing our loses and mistakes, while it is accurate, I also believe that we can learn a lot from reviewing our winning trades.

Below are my top 5 winning trades last year. While I am happy with my profits, my numbers showed I only have approx 21% average profit last year. (See previous post) Quite low if you ask me.

Reviewing my trades helped me identify problems in my process. Because of it I can implement some improvements that will hopefully improve my results this year.

1. $ROCK

chart by www.bigcharts.marketwatch.com

I noticed an increased in volume and a slight uptrend mid-November that triggered my buy signal. Sold it when it broke the trendline Dec. 15, 2017. I timely avoided a turn of trend in this trade.


2. $MAC

chart by www.bigcharts.marketwatch.com

Bought it September when I saw a tightening price volatility with an increase in volume. Sold it Around November 22 with a 41% profit when it broke my trailing stop.

This stock perfectly stayed above 50 SMA, which is usually my last line of support in a trade. I could've hold it and be alright by now. It looks ready to take another breakout this year, I'll be closely watching.

Also, I could've seen this stock earlier if I am diligently doing my research. I could've bought it around June or July of 2017. This reminds me to do my research and screening diligently so that I wont miss many buying opportunities in the future.

3. $WLCON

chart by www.bigcharts.marketwatch.com

Bought this twice in May with an average of P5.42/share. Held on to it until I am convinced that it broke the 50sma on October 11, 2017.

Starting now, I will respect the 50sma as my last line of support. I guess I was hoping for the price to go up once more and give me the opportunity to sell at a higher price. Hope is not a strategy. Follow the plan.

4. MRP

chart by www.bigcharts.marketwatch.com

Here is another one that I bought a little late. January 2017 is where the ideal entry should be. I guess I'm not religiously doing my screening by that time again. (reoccurring mistake).

Another mistake I made is when I sold this at P8.68, a safe distance from any of my trail stops. I could not explain this one, I don't know why I sold this at this price. I could've squeezed a little bit more from this trade if only I have just defined my selling strategy.

It is very evident by now that I need to work on my selling strategy. Something I am planning to improve this year.

5. $IMI

By now I have to admit that I have a very faulty selling strategy. This one is a good run from my entry price of P6.91 to my selling price of P13.30 in August.

Why do I feel like I sold too late this time? I know I did.

The stock broke 50SMA and I sold it. I followed my plan but I still lost a big chunk of the profit and I felt bad about it.

Conclusion

It is very clear by now that I should be working on my selling strategy. I don't have the perfect system yet and this trades proved it. I am currently working on a selling strategy to at least improve my profit's average percentage.

I will also be allocating more time in screening potential winners for me to catch them in their earlier stages. Nothing beats a lower average price.

My batting average of 52% (13 out of 25 trades) is good enough, but I need to catch these winner earlier and learn how to sell them. A concrete plan with a win-win result is on the drawing board.

By reviewing my trades,  I know where my mistakes are. Knowing my mistakes will help me create a specific plan to address each of them.

My next post will be about my top 5 losers.

Post 44: Summary of my 2017 Performance