6/13/2021 Stopped out of NIO short position this week at 43.5, and no change to other positions. Looking at CAT and DE for going long.

Hi everyone, welcome back. I hope you had a nice weekend!

This week I got stopped out of NIO for a 0.5% loss to my total account value. It took a bit longer to lose money on the trade than with the XPEV short, which is somewhat useful information for the future. Maybe it’s better to short the weaker looking stock (between XPEV and NIO) rather than the one that looks strong because momentum tends to carry prices further than anticipated.

NIO daily chart below. This adds to my current loss streak of trades (4), which is uncomfortable, but isn’t something that is unexpected. My worst loss streak since I started trading is 11 losses in a row, which ended with 16 losses out of 17 trades. Luckily, I’m doing a good job of managing risk, so the drawdown to my account isn’t as bad as it could be.

I’m still holding HPQ, TJX, and TWTR long positions, although TJX is behaving worse than anticipated. I am learning not to interfere with the original plan, so I will avoid making changes to these positions.

Some new stocks that passed my stock screener this week are CAT and DE. These stocks are highly correlated, so if I went long, I’d either do a half sized position in each (like with NIO and XPEV), or a full sized position in just one.

CAT stock below. Entering long at or slightly below current prices with a stop loss around the 205-210 range presents a decent opportunity if we plan to sell in the mid to high 240s. The last 4 pullbacks after a new high were never this large, so this could be the start of a trend reversal.

DE daily chart below. The chart looks similar to CAT, but the drop isn’t as violent.

Let’s see what happens next week. Volatility on the indexes has been quite low, so I don’t expect many large swings.


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