Long GOOG at 166.57 - Sometimes winning just means not losing.
已更新
I'll be the first to say that I don't LOVE this 
GOOG chart. The lower high on Nov 12 is never a good sign. The fact that there was a large correction before that makes me like it less. The new incoming FCC chair and the new President are no fans of big tech and have both called out GOOG specifically as a target. The DOJ is on them about anti-competitive practices, the EU hates them, etc etc.
So why trade it at all? Well, first, there were not a lot of other great options today and I need to keep my portfolio full and be able to cycle capital. I'll be posting about a trade I like even better after I'm done with this.
Secondly, GOOG's recent history suggests that I will do well due to the kind of trading I do. More on that in a minute.
And third, drawdowns don't scare me any more. They used to. But the system I use (especially the first profitable close exit strategy) makes it very difficult for me to have large drawdowns. It can happen, but it's very rare and even then, I don't suffer nearly as much as B/H.
You can see during the July swoon, not only would I not have lost money, I'd have made it. Modest returns, but a 20% difference between me and the underlying stock lets me sleep at night and makes B/H play a very tough game of catch up afterwards. Something that it would still not be close to having done 3 months later. After that 16.7% drop, it takes a 20% rise just to get back to break even.
I do think this very recent drop COULD be part of something larger going forward. I can't see the future better than anyone else, but I know I have the tools to handle it and probably profit from it, regardless of what happens, so I'm taking the trade.
Besides, everything isn't as bad as it looks. In the last 12 months, GOOG has given 20 buy signals. All 20 would have been profitable. Half of those profitable trades came during July and the drop after that in Aug/Sept.
14 of those 20 trades only lasted a day. It's hard to get caught in a big drop when you're in and out of a trade in a day. 10 of the 20 trades made more than 1% (3 of those 10 were > 2% and two were >3%). None took longer than 5 trading days, and that only happened once. Despite its ugliness, it has still been very profitable to trade.
While I would ALWAYS suggest long trades be done on solidly uptrending stocks whenever possible, there are ways to trade less than perfect (and even bad) charts and still make money consistently. Hopefully that will be the case here, whileGOOG tries to work off those late summer losses and catch back up to me.
By this time next week, this trade will ideally be a distant, profitable memory. As always, I will keep buying whenever it is oversold until the position is completely closed, and sell lots as they become end of day profitable.
Have a good weekend, Googlers!
GOOG chart. The lower high on Nov 12 is never a good sign. The fact that there was a large correction before that makes me like it less. The new incoming FCC chair and the new President are no fans of big tech and have both called out GOOG specifically as a target. The DOJ is on them about anti-competitive practices, the EU hates them, etc etc.So why trade it at all? Well, first, there were not a lot of other great options today and I need to keep my portfolio full and be able to cycle capital. I'll be posting about a trade I like even better after I'm done with this.
Secondly, GOOG's recent history suggests that I will do well due to the kind of trading I do. More on that in a minute.
And third, drawdowns don't scare me any more. They used to. But the system I use (especially the first profitable close exit strategy) makes it very difficult for me to have large drawdowns. It can happen, but it's very rare and even then, I don't suffer nearly as much as B/H.
You can see during the July swoon, not only would I not have lost money, I'd have made it. Modest returns, but a 20% difference between me and the underlying stock lets me sleep at night and makes B/H play a very tough game of catch up afterwards. Something that it would still not be close to having done 3 months later. After that 16.7% drop, it takes a 20% rise just to get back to break even.
I do think this very recent drop COULD be part of something larger going forward. I can't see the future better than anyone else, but I know I have the tools to handle it and probably profit from it, regardless of what happens, so I'm taking the trade.
Besides, everything isn't as bad as it looks. In the last 12 months, GOOG has given 20 buy signals. All 20 would have been profitable. Half of those profitable trades came during July and the drop after that in Aug/Sept.
14 of those 20 trades only lasted a day. It's hard to get caught in a big drop when you're in and out of a trade in a day. 10 of the 20 trades made more than 1% (3 of those 10 were > 2% and two were >3%). None took longer than 5 trading days, and that only happened once. Despite its ugliness, it has still been very profitable to trade.
While I would ALWAYS suggest long trades be done on solidly uptrending stocks whenever possible, there are ways to trade less than perfect (and even bad) charts and still make money consistently. Hopefully that will be the case here, while
GOOG tries to work off those late summer losses and catch back up to me.By this time next week, this trade will ideally be a distant, profitable memory. As always, I will keep buying whenever it is oversold until the position is completely closed, and sell lots as they become end of day profitable.
Have a good weekend, Googlers!
註釋
By the way, I forgot my normal disclaimer: This is intended as "edutainment", not a recommendation to buy or sell. Act accordingly and invest at your own risk. DYOR and only make investments/trades that make good financial sense for you in your current situation.
註釋
Trade summary for my records
Wins 1
Losses 0
Avg. gain / lot = +1.72%
Avg. holding period / lot = 1 day
Avg. gain / lot / day = +1.72%
Annualized return / lot / day held = 1.72% x 252 = +433%
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