T0rM3nTeD's paper trading journal

Hello everyone! I'll start with a summary about my current situation, and then what my plans are in the near and longer term future.

To start, my name is Chris, I'm 27 years old and married with student loans. I have a Bachelor's degree in Computer Science and am currently working as an engineer (???). My wife is also 27 years old and has a Bachelor's degree in nursing and is working in an ER (part time) and in a doctor's office (full time). I graduated College with about $25K in loans and my wife had about $40K. We have paid them off "fairly aggressively" and should be done at the end of this year. We also bought a house 6 months ago, and had to buy some furniture for that house as well. Between the marriage, loans, house, furniture, we've never really had "enough" money to invest.

Obviously we have both contributed to a 401K since starting working full-time when graduating college. I'm sitting with about $7500 in my 401K and my wife has about the same. My 401K is invested in an index fund that correlates with the S&P. We have $10K saved up in a "Savings account" which is purely cash right now just sitting in the bank in case of emergency.

By the end of the year when we have paid off our loans, we will be adding roughly $2K to that savings account every month (hopefully) which is when I'll be able to get out of paper trading and into the market. Those are my plans anyways - to be "practicing" with paper trading for the next year or so as I'm fairly new, and then transition to the market.

Because I don't have a large amount of money, my positions and amount of money that I am "willing to lose" on a trade will not be huge. The type of trading I am interested in is swing trading where I spend a few days to a few weeks in an investment.

While paper-trading, I will try to invest $5K-$10K MAX in one investment as I want to mimic the environment I will be experiencing when I transition to the market. I will RISK somewhere between $100-$500 in one trade depending on how much I like it and how comfortable I am feeling at the time.

One final note, I do not have a ton of money as I mentioned before, but while paper trading I will possibly have more money locked up than I will have when I start trading, but each trade is a learning experience and will be roughly the size of a trade I will make when I get into the market, just obviously will not be able to have a lot of trades pending simultaneously due to lack of funds.

I welcome ANY and ALL feedback on my trades, ideas, thoughts, etc. Please get involved and help mold me into a better trader and we can all learn together!

 

I just started paper trading a few days ago, though I have been researching the market on-and-off since 2012. Below are my 6 current open positions (after this post, I'll be talking more about my reasons for trading, any bids that I have put in for specific prices, etc. Just trying to keep this current with my "paper portfolio".).

Symbol: GE (LONG)
Date Entered: 4/5/16
Price Entered: $30.89
# of shares: 270
Total Investment: $8,330.30
Stop set: $29.50 (MAX RISK $400)

Symbol: FCAU (LONG)
Date Entered: 4/7/16
Price Entered: $6.90
# of shares: 625
Total Investment: $4,302.50
Stop set: $6.50 (MAX RISK $250)

Symbol: ACAD (SHORT)
Date Entered: 4/7/16
Price Entered: $33.05
# of shares: 136
Total Investment: $4,484.80
Stop set: $36.00 (MAX RISK $400)

Symbol: SKX (LONG)
Date Entered: 4/12/16
Price Entered: $26.03
# of shares: 196
Total Investment: $5,091.88
Stop set: $24.50 (MAX RISK $300)

Symbol: LB (LONG)
Date Entered: 4/12/16
Price Entered: $77.50
# of shares: 80
Total Investment: $6,190.00
Stop set: $75.00 (MAX RISK $200)

Symbol: CMG (LONG)
Date Entered: 4/12/16
Price Entered: $438.95
# of shares: 14
Total Investment: $6,135.30
Stop set: $425.00 (MAX RISK $200)

 

Current prices that I'm watching for an entry:

• WY (SHORT) to hit $31.85 with a stop at $33.00. - The stock has been overbought for quite some time now and has strong resistance at the $32 level. Would be relatively low risk to get out if it breaks through to $33.00.
• LULU (LONG) to hit $60.10 with a stop at $58.00. - After a good earnings report, the stock seems to have corrected itself back to the low $60's. There is support at $60 and the 200MA is sitting at just below $58. If the stock bounces off support at $60 it should head back up to the $65 region before needing to be re-evaluated.
• SPLS (SHORT) to hit $11.30 with a stop at $12.25. - The stock is currently sitting at resistance with a downtrend in the 200MA approaching at $11.52 currently. The stock is overbought and MACD is about to crossover. Everything points to this stock headed down.

 

Thanks Gil! Feel free to chime in with any thoughts or advice! I know you've been around a lot longer than I have and I could use all the "mentors" I can get!

 

Thanks for the advice! I'll keep your stop points in mind on anything that I'm getting close to. I have always had tendencies to "gamble" so I'll need to treat this craft as more of an investment and less of a gamble.

 

My WY (SHORT) and SPLS (SHORT) were triggered today. Will post the info when I get off mobile and on to a computer.

 

Excellent advice! I have an excel spreadsheet already where I am tracking all of my plays and adding notes whenever I have them to re-adjust my thoughts on my watches/current open positions/etc. I'm also tracking any stock that I've ever had an interest in and adding notes to them so that if I ever circle back to one, I will have some past information to clue me in to what I used to think about it. Thanks for taking the time.

I'm already noticing that I'm probably entering too many trades because I will not have the capital when I start trading for real to enter anywhere near this many. However, I am keeping them to the size that I will be trading them (probably) so they should still be good learning experiences. Like you said, as I learn more, I'll learn to filter out some of the thought processes that didn't work so well for me, so I don't think playing "too many" is really an issue at this moment unless I'm not adapting later.

 

Two more plays entered today.

Symbol: WY (SHORT)
Date Entered: 4/13/16
Price Entered: $31.85
# of shares: 174
Total Investment: $5,531.90
Stop set: $33.00 (MAX RISK $200)

Symbol: SPLS (SHORT)
Date Entered: 4/13/16
Price Entered: $11.30
# of shares: 421
Total Investment: $4,747.30
Stop set: $12.25 (MAX RISK $400)

 

Thoughts on ACAD which I posted a few posts above. The stock hit a low of $30.43 yesterday (SHORT trade entered at $33.05). I was targeting <$30 and the stock has made a move back up and is now sitting at $33.22. One of those situations where maybe I got a little too greedy, or maybe I'm still on the right track and it will head back down. The stock closed basically right on the 200MA today and is still overbought. I will re-evaluate tomorrow.



Thoughts on FCAU. As the 200MA continues downward while the prices continues upward, I'll probably be targeting a little over $8. The stock has been trading between the 6's and 8's for some time now, and with the 200MA at $8.76 and heading downward, it will probably be safe play to lock up profits at that point. There is resistance around $8.08 or so that I will probably set as a target price.



Thought on SKX. I entered this (at $26.03) with a target price of $34. I think I will first re-evaluate at $30 and decide where to go from there. This stock has been bouncing between $26 and $34 and unable to break through either one. I think $30 as the half-way point will be a good point to decide if I should take profits or continue up towards $34.



Thoughts on LB. I have a target of about $86 on this one. After the big drop last week, it appears to have hit it's bottom, is oversold, had large selling volume, and is now on it's way back up. The price drop and RSI looks eerily similar to the drop in February, so I'm hoping to see the same growth up to $86, or possibly $88 (with the 200MA possibly getting in the way of $88).

 

If JPM opens between $62.20ish and $62.70ish, I'll be playing it (LONG) with a stop at $61 and a target price of $67. Will update tomorrow if the play happens.

Thoughts behind the trade. Banks seem to be on the upswing this week after posting better than expected earnings. JPM closed above the 200MA today so if it opens above the 200MA, I'll expect it to remain above as the 200MA acts as support. MACD also just crossed over re-iterating the buy thought process.

 

Thankfully this range was not where the stock opened as it dropped 1.15% today and closed under the 200MA. If it can rebound next week and close over the 200MA, I'll look for another entrance.



I mentioned last week that I had a watch on LULU to hit $60.10 and it hit a low of $60.39, coming pretty damn close to hitting my target entry price. It's up every day since then and closed at $64.80. What could have been



On CMG I'm up nearly 7% and coming up on some short term resistance at $475. My initial target was $500, but with earnings approaching on 4/26, I may want to lock up my profit and see what happens after earnings. Will probably see how it plays around the $475 area before I decide if I want to make an earlier exit than planned.

 

Weekly update on open positions (total gain/loss since position was started):

LONG plays:

• GE: Entry price $30.89. Current price $31.03. +0.45%
• FCAU: Entry price $6.90. Current price $7.52. +8.99%
• SKX: Entry price $26.03. Current price $28.69. +10.22%
• LB: Entry price $77.50. Current price $82.26. +6.14%
• CMG: Entry price $438.95. Current price $469.29. +6.91%

SHORT plays:

• ACAD: Entry price $33.05. Current price $33.52. -1.42%
• WY: Entry price $31.85. Current price $31.73. +0.38%
• SPLS: Entry price $11.30. Current price $11.15. +1.33%

 

Current watches:

• DIS (LONG) - I will be watching this one at open to see where it opens. The 200MA is at $104 with the stock price sitting between the 200MA and $100 (a round number that will hopefully act as support now). I'm watching to see how this one reacts to these variables, as I think it should get up to $120 in the fairly near future if it can get through the 200MA.
• WYN (LONG) to hit $75.50 with a stop at $74 - There is support between $74-$75, plus the 200MA at $74.76. The 50MA is in an uptrend and could break through the 200MA soon and create a bullish signal.

 

Getting close to an exit in FCAU. Had my target price set at $8.10 and it's currently sitting at $7.98 with a high of today at $8.02. Could reach it today, and I may just end this one a few cents early to lock up profits. Much higher risk to keep it open too long going for such a smaller % increase when it could drop tomorrow.

 

Just pulled the trigger and sold FCAU for a 16.67% profit. Results of the trade below.

Symbol: FCAU (LONG)
Date Entered: 4/7/16
Price Entered: $6.90
# of shares: 625
Total Investment: $4,312.50
Stop set: $6.50 (MAX RISK $250)
Target set: $8.10
Date Exited: 4/19/16
Price Exited: $8.05
Total Return: $5,031.25
% Return: +16.67%
Profit (after $20 total trading fees): +$698.75
Immediate Thoughts: I'm happy with how the trade played out. Set the perfect entry price at the low for the day. I didn't think the stock would dip too far into the 6's so I made that my entry target. It headed straight up and didn't stop, but I see resistance in the 8's. I think this will be a good one to keep watching as it should stay in this upper $6 - lower $8 range, so profit can probably be made multiple times until any big news is heard with the company. I decided to exit the trade early, as this is a stock that tends to make big jumps sporadically between trading days. I decided to lock up profit slightly early and before my target price was hit due to the nature of the much larger downside of waiting too long, versus the +0.7% upside of waiting until my target price is hit.

 

Earnings on Skechers is tomorrow after close. It's currently sitting at $30.03 and I'm up over 15%. My target was $34, but I think it might be safer to lock up my profit at this point. I'll have to decide tomorrow before the market closes.