August 2014: +7.33 / 44.91% YTD

After a rough end of July and rough start to August, the market turned and I captured some nice gains the last two weeks.

 Monthly stats:

 YTD:  My rough patch shows up in my equity curve which when horizontal, formed a double bottom and then a breakout to the upside (if only it were that easy):




YTD Stats


Benchmark comparison:
The russell has lagged. But interestingly, most of my gains this past month were in small caps names.

August Total number of trades:	10	Profit factor:	3.07
% of winning trades:	(70.0%)	Average hold time (winning trades):	3 days
% of losing trades:	(30.0%)	Average hold time (losing trades):	1 day
Max consecutive wins:	6	Max consecutive losses:	2

So how did I get back on track?

• Keeping most individual losses small
• Kept putting lines back into the water
• When they started hitting put on positions with size
• Begin Big Gain Hunting plan.
• CDXS
• LRAD
• PIP
• HPJ   I now feel I've found a tradable pattern even if the stocks do not produce Jesse Stine type gains. -- CDXS has quietly produced a 25% gain.
• Bought stocks in consolidation near moving average, (HCLP, HIMX, BLUE), which minimized risk of loss and maximized gains.
• Sold "pops"

What Mistakes did I make?

• Plug option trade.  (although the loss was very minimal, my research was correct and had I bought the stock I would have had a huge gain on the earnings pop)
• Did not see my FOLD trade to fruition, with covered calls I had it would have returned over 40%.
• VRNS turn around trade,  I put too much size on this trade, which caused me to get shaken out when my loss parameters were hit.  Of course, it then turned and is currently moving to the upside--without me.
• A few undisciplined trade, CRR (bounce play-dumb). -- That's a trade not in my playbook and I paid the price. 
• EJ, which is  currently open that rules were broken due to too much size.
•  I've justified not taking the loss yet due to:
•  unwarranted downgrade by Goldman due Leju  getting ahead of itself
• the selling low volume, and
• My conviction that it will ultimately produce big gains since it is trading below the value of its assets due to its LEJU holdings. 
• Numerous large gains within the last two weeks, which greatly exceed what I'm currently down in EJ.  
• Since the consolidation pattern is not broken, my biggest mistake was the size I put on the trade.   

Goals for next month:

• Continue Big Gain Hunting program
• buy Swing trades in consolidation close to Magic MA
• Continue to use 
• Position size appropriately.
•  Gauge aggressiveness depending on market conditions.