Saturday, April 30, 2011

Citrix Systems, Inc. (CTXS)

1. LONG the week of 4.21.03 at $17.84. Using $12.02 for a stop, our initial risk (R) on the trade was $5.82. Stopped out and reversed to short at $19.47 the week of 2.9.04. The percentage gain on the trade was 9.1%, and the reward-to-risk ratio was $1.63/$5.82 = 0.28. 



2. SHORT the week of 2.9.04 at $19.47. With the stop at $25.34 the R was $5.87. Stopped out and reversed to long at $20.22 the week of 10.4.04. The percentage loss on the trade was -3.9%, and the reward-to-risk ratio was -$0.75/$5.87 = -0.13. 

3. LONG the week of 10.4.04 at $20.22. My stop was $15.71, so R = $4.51. Stopped out and reversed to short the week of 7.10.06 at $34.70. The percentage gain on the trade was 71.6%, and the reward-to-risk ratio was $14.48/$4.51 = 3.21.

4. SHORT the week of 7.10.06 at $34.70. With the stop set at $44.47 my risk was $9.77. Stopped out and reversed to long at $33.51 the week of 4.2.07. The percentage gain on the trade was 3.4%, and the reward-to-risk ratio was $1.19/$9.77 = 0.12.

5. LONG the week of 4.2.07 at $33.51. My stop was $27.73, so R = $5.78. Stopped out and reversed to short at $34.59 the week of 1.7.08. The percentage gain on the trade was 3.2%, and the reward-to-risk ratio was $1.08/$5.78 = 0.19.

6. SHORT the week of 1.7.08 at $34.59. Placing my stop at $42.34, the risk on the trade was $7.75. Stopped out and reversed to long the week of 4.27.09 at $27.51. The percentage gain on the trade was 20.5%, and the reward-to-risk ratio was $7.08/$7.75 = 0.91.

7. LONG the week of 4.27.09 at $27.51. The stop was $19.55, so R = $7.96. Closed yesterday at $84.34 with a $61.79 stop. The percentage gain on this trade is 206.6%, and the reward-to-risk ratio is $56.83/$7.96 = 7.14.

Bottom Line:
Winning Trades: 6 | 85.7% | $13.72/share avg.
Losing Trades: 1 | 14.3% | -$0.75/share
Average Trade: Gain of 44.4% | $11.65/share | Reward-to-Risk Ratio (R): 1.68

Friday, April 29, 2011

Cognizant Technology Solutions (CTSH)

1. LONG the week of 9.2.03 at $9.69. Using $7.01 for a stop, our initial risk (R) on the trade was $2.68. Stopped out and reversed to short (by just $0.04!) the week of 3.8.04 at $10.95. The percentage gain on the trade was 13.0%, and the reward-to-risk ratio was $1.26/$2.68 = 0.47. 



2. SHORT the week of 3.8.04 at $10.95. With my stop set at $14.15 the R was $3.20. Stopped out and reversed to long the week of 9.27.04 at $15.08. The percentage loss on the trade was -37.7%, and the reward-to-risk ratio was -$4.13/$3.20 = -1.29. 

3. LONG the week of 9.27.04 at $15.08. The stop was $11.52, so R = $3.56. Stopped out and reversed to short at $37.85 the week of 5.21.07. The percentage gain on the trade was 151.0%, and the reward-to-risk ratio was $22.77/$3.56 = 6.39. 

4. SHORT the week of 5.21.07 at $37.85. With $45.91 for a stop, the risk on the trade was $8.06. Stopped out and reversed to long the week of 4.6.09 at $23.62. The percentage gain on the trade was 37.6%, and the reward-to-risk ratio was $14.23/$8.06 = 1.77. 

5. LONG the week of 4.6.09 at $23.62.  My stop was set at $16.25, so R = $7.37. Closed last week at $82.47 with $70.63 for a stop. The percentage gain on this trade is 249.2%, and the reward-to-risk ratio is $58.85/$7.37 = 7.99.

Bottom Line:
Winning Trades: 4 | 80.0% | $24.28/share avg.
Losing Trades: 1 | 20.0% | -$4.13/share
Average Trade: Gain of 82.6% | $18.60/share | Reward-to-Risk Ratio (R): 3.06

Thursday, April 28, 2011

Deckers Outdoor Corporation (DECK)

1. SHORT the week of 4.18.05 at $8.58. Using $12.66 for my stop, the initial risk (R) on the trade was $4.08. Stopped out and reversed to long at $10.12 the week of 12.5.05. The percentage loss on the trade was -17.9%, and the reward-to-risk ratio was -$1.54/$4.08 = -0.38.



2. LONG the week of 12.5.05 at $10.12. With the stop set at $6.91 the R was $3.21. Stopped out and reversed to short the week of 2.25.08 at $36.88. The percentage gain on the trade was 264.4%, and the reward-to-risk ratio was $26.76/$3.21 = 8.34.

3. SHORT the week of 2.25.08 at $36.88. The stop was $53.65, so R = $16.77. Stopped out and reversed to long (by just $0.01!!!) at $46.52 the week of 6.16.08. The percentage loss on the trade was -26.1%, and the reward-to-risk ratio was -$9.64/$16.77 = -0.57.

4. LONG the week of 6.16.08 at $46.52. With $33.52 for my stop the risk on the trade was $13.00. Stopped out and reversed to short at $29.70 the week of 9.29.08. The percentage loss on the trade was -36.2%, and the reward-to-risk ratio was -$16.82/$13.00 = -1.29.

5. SHORT the week of 9.29.08 at $29.70.  The stop was $44.81, so that means R was $15.11. Stopped out and reversed to long the week of 6.8.09 at $23.80. The percentage gain on the trade was 19.9%, and the reward-to-risk ratio was $5.90/$15.11 = 0.39.

6. LONG the week of 6.8.09 at $23.80. My stop was $15.11, so my R was $8.69. Closed last week at $96.11 with a $72.32 stop. The percentage gain on this trade is 303.8%, and the reward-to-risk ratio is $72.31/$8.69 = 8.32.

Bottom Line:
Winning Trades: 3 | 50.0% | $34.99/share avg.
Losing Trades: 3 | 50.0% | -$9.33/share avg.
Average Trade: Gain of 84.6% | $12.83/share | Reward-to-Risk Ratio (R): 2.47

Wednesday, April 27, 2011

Potash Corporation of Saskatchewan, Inc. (POT)

We've covered both CF Industries and Mosaic in the last week, so let's go ahead and take another look at Potash Corporation to round out the set. 

Just as an FYI, due to low (and even negative) expected returns and/or risk profiles , I no longer trade Agrium, Monsanto, or Freeport-McMoRan, and I've never traded Intrepid Potash. 



1. LONG the week of 9.2.03 at $3.84. Using $3.41 for my stop, the initial risk (R) on the trade was $0.43. Stopped out and reversed to short at $10.11 the week of 9.26.05. The percentage gain on the trade was 163.3%, and the reward-to-risk ratio was $6.27/$0.43 = 14.68. 

2. SHORT the week of 9.26.05 at $10.11. With my stop at $12.17 the R was $2.06. Stopped out and reversed to long at $10.62 the week of 2.27.06. The percentage loss on the trade was -5.0%, and the reward-to-risk ratio was -$0.51/$2.06 = -0.25. 

3. LONG the week of 2.27.06 at $10.62. The stop was $8.47, so R = $2.15. Stopped out and reversed to short the week of 6.5.06 at $9.05. The percentage loss on the trade was -14.8%, and the reward-to-risk ratio was -$1.57/$2.15 = -0.73.

4. SHORT the week of 6.5.06 at $9.05. With my stop at $11.53 the R was $2.48. Stopped out and reversed to long at $10.84 the week of 9.5.06. The percentage loss on the trade was -19.8%, and the reward-to-risk ratio was -$1.79/$2.48 = -0.72.

5. LONG the week of 9.5.06 at $10.84. My stop was $9.15, so R = $1.69. Stopped out and reversed to short the week of 9.2.08 at $53.47. The percentage gain on the trade was 393.3%, and the reward-to-risk ratio was $42.63/$1.69 = 25.29.

6. SHORT the week of 9.5.06 at $53.47. Setting my stop at $76.33, the R on the trade was $22.86. Stopped out and reversed to long at $29.98 the week of 4.27.09. The percentage gain on the trade was 43.9%, and the reward-to-risk ratio was $23.49/$22.86 = 1.03.

7. LONG the week of 4.27.09 at $29.98.  Using $18.48 for a stop, the R = $11.50. Stopped out and reversed to short at $28.33 the week of 9.28.09. The percentage loss on the trade was -5.5%, and the reward-to-risk ratio was -$1.65/$11.50 = -0.14.

8. SHORT the week of 9.28.09 at $28.33. With the stop at $36.92 the R was $8.59. Stopped out and reversed to long the week of 11.16.09 at $38.08. The percentage loss on the trade was -34.4%, and the reward-to-risk ratio was -$9.75/$8.59 = -1.13.

9. LONG the week of 11.16.09 at $38.08. The stop was $28.88, so that means R was $9.20. Stopped out and reversed to short the week of 5.3.10 at $33.25. The percentage loss on the trade was -12.7%, and the reward-to-risk ratio was -$4.83/$9.20 = -0.53.

10. SHORT the week of 5.3.10 at $33.25. My stop was set at $42.23, so the risk on the trade was $8.98. Stopped out and reversed to long at $37.80 the week of 8.2.10. The percentage gain on the trade was -13.7%, and the reward-to-risk ratio was -$4.55/$8.98 = -0.51.

11. LONG the week of 8.2.10 at $37.80. The stop was $29.08, so R = $8.72. Closed last week at $57.96 with a $50.50 stop. The percentage gain on this trade is 53.3%, and the reward-to-risk ratio is $20.16/$8.72 = 2.31.

Bottom Line:
Winning Trades: 4 | 36.4% | $23.14/share avg.
Losing Trades: 7 | 63.6% | -$3.52/share avg.
Average Trade: Gain of 49.8% | $6.17/share | Reward-to-Risk Ratio (R): 3.57

Tuesday, April 26, 2011

Cummins Inc. (CMI)

How has Cummins' stock traded since I first blogged about it back on March 26th when it was selling for a little over $104? Well, they reported great first quarter earnings before the bell this morning and the stock is trading above $116 right now, so I'd say it has continued to trade pretty well... 



1. LONG the week of 5.19.03 at $7.05. My stop was $5.60, so the initial risk (R) on the trade was $1.45. Stopped out and reversed to short at $16.39 the week of 3.28.05. The percentage gain on the trade was 132.5%, and the reward-to-risk ratio was $9.34/$1.45 = 6.45.

2. SHORT the week of 3.28.05 at $16.39. Using $19.08 for a stop, R = $2.69. Stopped out and reversed to long the week of 7.11.05 at $18.20. The percentage loss on the trade was -11.0%, and the reward-to-risk ratio was -$1.81/$2.69 = -0.67.

3. LONG the week of 7.11.05 at $18.20. With the stop set at $15.57 the R was $2.63. Stopped out and reversed to short at $18.25 the week of 10.17.05. The percentage gain on the trade was 0.3%, and the reward-to-risk ratio was $0.05/$2.63 = 0.02.

4. SHORT the week of 10.17.05 at $18.25. The stop was $21.25, so my risk was $3.00. Stopped out and reversed to long at $21.09 the week of 11.28.05. The percentage loss on the trade was -15.6%, and the reward-to-risk ratio was -$2.84/$3.00 = -0.95.

5. LONG the week of 11.28.05 at $21.09. With $18.44 for my stop the R on the trade was $2.65. Stopped out and reversed to short the week of 1.3.07 at $27.50. The percentage gain on the trade was 30.4%, and the reward-to-risk ratio was $6.41/$2.65 = 2.42.

6. SHORT the week of 1.3.07 at $27.50.  The stop was $31.35, so that means R was $3.85. Stopped out and reversed to long the week of 1.29.07 at $33.01. The percentage loss on the trade was -20.0%, and the reward-to-risk ratio was -$5.51/$3.85 = -1.43.

7. LONG the week of 1.29.07 at $33.01. My stop was $28.06, so my R was $4.95. Stopped out and reversed to short at $44.32 the week of 9.22.08. The percentage gain on the trade was 34.3%, and the reward-to-risk ratio was $11.31/$4.95 = 2.28.

8. SHORT the week of 9.22.08 at $44.32. The initial stop was $71.90, so R = $27.58. Stopped out and reversed to long the week of 4.20.09 at $32.66. The percentage gain on the trade was 26.3%, and the reward-to-risk ratio was $11.66/$27.58 = 0.42. 

9. LONG the week of 4.20.09 at $32.66. With the stop set at $18.82 the R was $13.84. Closed last week at $108.94 with a $92.27 stop. The percentage gain on this trade is 233.6%, and the reward-to-risk ratio is $76.28/$13.84 = 5.51.

Bottom Line:
Winning Trades: 6 | 66.7% | $19.18/share avg.
Losing Trades: 3 | 33.3% | -$3.39/share avg.
Average Trade: Gain of 45.6% | $11.65/share | Reward-to-Risk Ratio (R): 1.56

Monday, April 25, 2011

Mosaic Co. (MOS)

1. SHORT the week of 12.13.04 at $17.15. With the stop set at $20.66 the initial risk (R) on the trade was $3.51. Stopped out and reversed to long at $16.29 the week of 7.5.05. The percentage gain on the trade was 5.0%, and the reward-to-risk ratio was $0.86/$3.51 = 0.25.


2. LONG the week of 7.5.05 at $16.29. The stop was $13.04, so R = $3.25. Stopped out and reversed to short the week of 10.3.05 at $14.66. The percentage loss on the trade was -10.0%, and the reward-to-risk ratio was -$1.63/$3.25 = -0.50.

3. SHORT the week of 10.3.05 at $14.66. Using $17.64 for a stop, the R on the trade was $2.98. Stopped out and reversed to long at $15.68 the week of 1.3.06. The percentage loss on the trade was -7.0%, and the reward-to-risk ratio was -$1.02/$2.98 = -0.34.

4. LONG the week of 1.3.06 at $15.68.  My stop was set at $13.15, so my R was $2.53. Stopped out and reversed to short the week of 9.2.08 at $94.52. The percentage gain on the trade was 502.8%, and the reward-to-risk ratio was $78.84/$2.53 = 31.11.

5. SHORT the week of 9.2.08 at $94.52. The stop was $144.48, so that means R was $49.96. Stopped out and reversed to long at $45.45 the week of 5.4.09. The percentage gain on the trade was 51.9%, and the reward-to-risk ratio was $49.07/$49.96 = 0.98.

6. LONG the week of 5.4.09 at $45.45.  My stop was set at $27.24, so my R was $18.21. Stopped out and reversed to short the week of 4.26.10 at $51.14. The percentage gain on the trade was 12.5%, and the reward-to-risk ratio was $5.69/$18.21 = 0.31.

7. SHORT the week of 4.26.10 at $51.14. The stop was $63.56, so that means R was $12.42. Stopped out and reversed to long at $56.64 the week of 8.16.10. The percentage loss on the trade was -10.8%, and the reward-to-risk ratio was -$5.50/$12.42 = -0.44.

8. LONG the week of 8.16.10 at $56.64. The stop was $41.86, so R = $14.78. Closed last week at $76.77 with a stop at $68.85. The percentage gain on this trade is 35.5%, and the reward-to-risk ratio is $20.13/$14.78 = 1.36.

Bottom Line:
Winning Trades: 5 | 62.5% | $30.92/share avg.
Losing Trades: 3 | 37.5% | -$2.72/share
Average Trade: Gain of 72.5% | $18.31/share | Reward-to-Risk Ratio (R): 4.09

Sunday, April 24, 2011

Lululemon Athletica Inc. (LULU)

In my first post about Lululemon back in March I made it clear that I did not take either of the following trading signals. But missing a 900% gain is actually the least of my problems here. You see, my wife is the one that suggested I should trade Lululemon in the first place... and I didn't listen to her.     



1. SHORT signal the week of 11.10.08 at $8.24. Using $22.43 as a stop, the initial risk (R) on the trade would have been $14.19. Stop out and reverse to long signal the week of 3.30.09 at $10.20. The percentage loss on the trade would have been -23.8%, and the reward-to-risk ratio was -$1.96/$14.19 = -0.14.

2. LONG signal the week of 3.30.09 at $10.20. The stop would have been $4.57, so R = $5.63. Closed Thursday at $102.17 with a stop at $72.14. The percentage gain on this trade would be 901.7%, and the reward-to-risk ratio is $91.97/$5.63 = 16.34. 

Bottom Line:
Winning Trades: 1 | 50.0% | $91.97/share
Losing Trades: 1 | 50.0% | -$1.96/share
Average Trade: Gain of 438.9% | $45.01/share | Reward-to-Risk Ratio (R): 8.10

Saturday, April 23, 2011

Shutterfly, Inc. (SFLY)

1. LONG the week of 6.11.07 at $22.00. Using $16.61 for a stop, the initial risk (R) on the trade was $5.39. Stopped out and reversed to short at $20.75 the week of 12.31.07. The percentage loss on the trade was -5.7%, and the reward-to-risk ratio was -$1.25/$5.39 = -0.23. 




2. SHORT the week of 12.31.07 at $20.75. The stop was $32.81, so R = $12.06. Stopped out and reversed to long the week of 4.6.09 at $10.53. The percentage gain on the trade was 49.3%, and the reward-to-risk ratio was $10.22/$12.06 = 0.85.

3. LONG the week of 4.6.09 at $10.53. With my stop set at $6.56 the R was $3.97. Closed this past week at $54.54 with a $41.28 stop. The percentage gain on this trade is 417.9%, and the reward-to-risk ratio is $44.01/$3.97 = 11.08.

Bottom Line:
Winning Trades: 2 | 66.7% | $27.12/share avg.
Losing Trades: 1 | 33.3% | -$1.25/share
Average Trade: Gain of 153.8% | $17.66/share | Reward-to-Risk Ratio (R): 3.90

Friday, April 22, 2011

Caterpillar, Inc. (CAT)

Earth Day seems like a good day to talk about about warm and fuzzy things like caterpillars. 

1. LONG the week of 3.17.03 at $21.99. Using $17.67 for a stop, the initial risk (R) on the trade was $4.32. Stopped out and reversed to short at $31.62 the week of 7.19.04. The percentage gain on the trade was 43.8%, and the reward-to-risk ratio was $9.63/$4.32 = 2.23.



2. SHORT the week of 7.19.04 at $31.62. With the stop at $36.71 the R was $5.09. Stopped out and reversed to long at $34.81 the week of 9.27.04. The percentage loss on the trade was -10.1%, and the reward-to-risk ratio was -$3.19/$5.09 = -0.63. 

3. LONG the week of 9.27.04 at $34.81. The stop was $30.29, so R = $4.52. Stopped out and reversed to short the week of 4.11.05 at $36.39. The percentage gain on the trade was 4.5%, and the reward-to-risk ratio was $1.58/$4.52 = 0.35.

4. SHORT the week of 4.11.05 at $36.39. With my stop at $42.44 the R was $6.05. Stopped out and reversed to long at $42.50 the week of 6.6.05. The percentage loss on the trade was -16.8%, and the reward-to-risk ratio was -$6.11/$6.05 = -1.01.

5. LONG the week of 6.6.05 at $42.50. The stop was $36.82, so R = $5.68. Stopped out and reversed to short the week of 9.11.06 at $58.52. The percentage gain on the trade was 37.7%, and the reward-to-risk ratio was $16.02/$5.68 = 2.82.

6. SHORT the week of 9.11.06 at $58.52. Setting my stop at $69.73, the R on the trade was $11.21. Stopped out and reversed to long at $61.09 the week of 2.12.07. The percentage loss on the trade was -4.4%, and the reward-to-risk ratio was -$2.57/$11.21 = -0.23.

7. LONG the week of 2.12.07 at $61.09.  Using $53.27 for a stop, the R = $7.82. Stopped out and reversed to short at $64.41 the week of 11.5.07. The percentage gain on the trade was 5.4%, and the reward-to-risk ratio was $3.32/$7.82 = 0.42.

8. SHORT the week of 11.5.07 at $64.41. With the stop at $77.41 the R was $13.00. Stopped out and reversed to long the week of 3.31.08 at $71.60. The percentage loss on the trade was -11.2%, and the reward-to-risk ratio was -$7.19/$13.00 = -0.55.

9. LONG the week of 3.31.08 at $71.60. The stop was $58.56, so that means R was $13.04. Stopped out and reversed to short the week of 6.30.08 at $64.98. The percentage loss on the trade was -9.2%, and the reward-to-risk ratio was -$6.62/$13.04 = -0.51.

10. SHORT the week of 6.30.08 at $64.98. With the stop set at $77.85 the R was $12.87. Stopped out and reversed to long at $35.82 the week of 4.27.09. The percentage gain on the trade was 44.9%, and the reward-to-risk ratio was $29.16/$12.87 = 2.27.

11. LONG the week of 4.27.09 at $35.82. The stop was $22.29, so R = $13.53. Closed yesterday at $109.42 with a $97.68 stop. The percentage gain on this trade is 205.5%, and the reward-to-risk ratio is $73.60/$13.53 = 5.44.

Bottom Line:
Winning Trades: 6 | 54.5% | $22.22/share avg.
Losing Trades: 5 | 45.5% | -$5.14/share avg.
Average Trade: Gain of 26.4% | $9.78/share | Reward-to-Risk Ratio (R): 0.96

Thursday, April 21, 2011

Acme Packet, Inc. (APKT)

To be perfectly honest, saying that my 4 Acme Packet trades have averaged 293.9% is a lot like saying Warren Buffett and I have an average net worth of $25 billion... 

1. SHORT the week of 2.4.08 at $8.16. With my stop at $12.60 the initial risk (R) on the trade was $4.44. Stopped out and reversed to long the week of 9.15.08 at $7.54. The percentage gain on the trade was 7.6%, and the reward-to-risk ratio was $0.62/$4.44 = 0.14.



2. LONG the week of 9.15.08 at $7.54. The stop was $4.42, so R = $3.12. Stopped out and reversed to short at $4.10 the week of 10.6.08. The percentage loss on the trade was -45.6%, and the reward-to-risk ratio was -$3.44/$3.12 = -1.10.

3. SHORT the week of 10.6.08 at $4.10. Using $7.59 for a stop, the R was $3.49. Stopped out and reversed to long the week of 3.9.09 at $5.39. The percentage loss on the trade was -31.5%, and the reward-to-risk ratio was -$1.29/$3.49 = -0.37.

4. LONG the week of 3.9.09 at $5.39. My stop was $2.89, so the R = $2.50. Closed last week at $72.50 with a $53.07 stop. The percentage gain on this trade is 1,245.1%, and the reward-to-risk ratio is $67.11/$2.50 = 26.86.

Bottom Line:
Winning Trades: 2 | 50.0% | $33.87/share avg.
Losing Trades: 2 | 50.0% | -$2.37/share avg.
Average Trade: Gain of 293.9% | $15.75/share | Reward-to-Risk Ratio (R): 6.38

Wednesday, April 20, 2011

Diamond Offshore Drilling, Inc. (DO)

Diamond Offshore will announce Q1 2011 earnings tomorrow morning before the opening bell, so let's take another quick look at how the stock has traded since 2004. 

1. LONG the week of 1.5.04 at $16.21. Using $13.67 as a stop the initial risk (R) on the trade was $2.54. Stopped out and reversed to short at $52.27 the week of 7.17.06. The percentage gain on the trade was 222.5%, and the reward-to-risk ratio was $36.06/$2.54 = 14.18.



2. SHORT the week of 7.17.06 at $52.27. With my stop set at $69.22 the R was $16.95. Stopped out and reversed to long the week of 12.11.06 at $63.59. The percentage loss on the trade was -21.7%, and the reward-to-risk ratio was -$11.32/$16.95 = -0.67. 

3. LONG the week of 12.11.06 at $63.59. The stop was $50.79, so R = $12.80. Stopped out and reversed to short at $89.39 the week of 9.2.08. The percentage gain on the trade was 40.6%, and the reward-to-risk ratio was $25.80/$12.80 = 2.02.

4. SHORT the week of 9.2.08 at $89.39. My stop was $114.14, so the R was $24.75. Stopped out and reversed to long at $72.30 the week of 5.4.09. The percentage gain on the trade was 19.1%, and the reward-to-risk ratio was $17.09/$24.75 = 0.69.

5. LONG the week of 5.4.09 at $72.30. The stop was $51.34, so R = $20.96. Stopped out and reversed to short the week of 3.15.10 at $81.75. The percentage gain on the trade was 13.1%, and the reward-to-risk ratio was $9.45/$20.96 = 0.45.
 
6. SHORT the week of 3.15.10 at $81.75. With my $97.85 stop the R on the trade was $16.10. Stopped out and reversed to long at $70.57 the week of 1.3.11. The percentage gain on the trade was 13.7%, and the reward-to-risk ratio was $11.18/$16.10 = 0.69.

7. LONG the week of 1.3.11 at $70.57.  Using $57.65 for the intitial stop, my R = $12.92. Closed last week at $74.99 with a stop at $65.32. The percentage gain on this trade is 12.9%, and the reward-to-risk ratio is $4.42/$12.92 = 0.34.

Scorecard:
Winning Trades: 6 | 85.7% | $17.33/share avg.
Losing Trades: 1 | 13.3% | -$11.32/share
Average Trade: Gain of 41.9% | $13.24/share | Reward-to-Risk Ratio (R): 2.53 

Tuesday, April 19, 2011

CF Industries Holdings, Inc. (CF)

Aside from being great stocks to trade, CF Industries, Mosaic, and Potash Corporation have taught me a great deal about correlation, position sizing, and non-systemic risk. 

1. LONG the week of 10.2.06 at $17.91. With the stop at $14.99 the initial risk (R) on the trade was $2.92. Stopped out and reversed to short the week of 9.22.08 at $90.78. The percentage gain on the trade was 406.9%, and the reward-to-risk ratio was $72.87/$2.92 = 24.97.



2. SHORT the week of 9.22.08 at $90.78. Using $164.45 for a stop, the R was $73.67. Stopped out and reversed to long the week of 3.23.09 at $72.76. The percentage gain on the trade was 19.9%, and the reward-to-risk ratio was $18.02/$73.67 = 0.24.

3. LONG the week of 3.23.09 at $72.76. The stop was $45.63, so R = $27.13. Stopped out and reversed to short at $84.88 the week of 4.19.10. The percentage gain on the trade was 16.7%, and the reward-to-risk ratio was $12.12/$27.13 = 0.45.

4. SHORT the week of 4.19.10 at $84.88. With the stop set at $102.29 the R was $17.41. Stopped out and reversed to long the week of 8.2.10 at $84.21. The percentage gain on the trade was 0.8%, and the reward-to-risk ratio was $0.67/$17.41 = 0.04.
 
5. LONG the week of 8.2.10 at $84.21. The stop was $62.02, so that makes R $22.19. Closed at $129.98 last week with a $113.33 stop. The percentage gain on this trade is 54.4%, and the reward-to-risk ratio is $45.77/$22.19 = 2.06.

Scorecard:
Winning Trades: 5 | 100.0% | $29.89/share avg.
Losing Trades: 0 | 0.0% | -$0.00/share
Average Trade: Gain of 99.7% | $29.89/share | Reward-to-Risk Ratio (R): 5.55

Monday, April 18, 2011

Netflix, Inc. (NFLX)

1. SHORT the week of 8.2.04 at $16.91. Setting my stop at $30.66, the initial risk (R) on the trade was $13.75. Stopped out and reversed to long at $14.28 the week of 5.9.05. The percentage gain on the trade was 15.6%, and the reward-to-risk ratio was $2.63/$13.75 = 0.19.



2. LONG the week of 5.9.05 at $14.28. Using $9.96 for a stop, the R was $4.32. Stopped out and reversed to short the week of 7.10.06 at $24.19. The percentage gain on the trade was 69.4%, and the reward-to-risk ratio was $9.91/$4.32 = 2.29.

3. SHORT the week of 7.10.06 at $24.19. The stop was $30.59, so R = $6.40. Stopped out and reversed to long at $27.59 the week of 10.23.06. The percentage loss on the trade was -14.1%, and the reward-to-risk ratio was -$3.40/$6.40 = -0.53.

4. LONG the week of 10.23.06 at $27.59. With $20.53 for a stop the R on the trade was $7.06. Stopped out and reversed to short at $22.71 the week of 1.8.07. The percentage loss on the trade was -17.7%, and the reward-to-risk ratio was -$4.88/$7.06 = -0.69.

5. SHORT the week of 1.8.07 at $22.71.  The stop was $28.57, so that means R was $5.86. Stopped out and reversed to long the week of 10.1.07 at $22.00. The percentage gain on this trade was 3.1%, and the reward-to-risk ratio was $0.71/$5.86 = 0.12.

6. LONG the week of 10.1.07 at $22.00. The stop was $16.82, so R for the trade was $5.18. Stopped out and reversed to short at $26.74 the week of 6.23.08. The percentage gain on the trade was 21.5%, and the reward-to-risk ratio was $4.74/$5.18 = 0.91.

7. SHORT the week of 6.23.08 at $26.74. The initial stop was $37.73, so R = $10.99. Stopped out and reversed to long at $29.87 the week of 12.29.08. The percentage loss on the trade was -11.7%, and the reward-to-risk ratio was -$3.13/$10.99 = -0.28.

8. LONG the week of 12.29.08 at $29.87. With the stop set at $19.25 the R was $10.62. Closed Friday at $235.49 with a $182.92 stop. The percentage gain on this trade is 688.4%, and the reward-to-risk ratio is $205.62/$10.62 = 19.37.

Scorecard:
Winning Trades: 5 | 62.5% | $44.72/share avg.
Losing Trades: 3 | 37.5% | -$3.80/share avg.
Average Trade: Gain of 94.3% | $26.53/share | Reward-to-Risk Ratio (R): 2.67

Sunday, April 17, 2011

Baidu, Inc. (BIDU)

1. LONG the week of 5.8.06 at $7.85. Using a $4.98 stop, the initial risk (R) on the trade was $2.87. Stopped out and reversed to short (by just $0.01!) at $9.57 the week of 3.12.07. The percentage gain on the trade was 21.9%, and the reward-to-risk ratio was $1.72/$2.87 = 0.60. 



2. SHORT the week of 3.12.07 at $9.57. With the stop at $12.46 the R was $2.89. Stopped out and reversed to long at $12.46 the week of 4.23.07. The percentage loss on the trade was -30.2%, and the reward-to-risk ratio was -$2.89/$2.89 = -1.00. 

3. LONG the week of 4.23.07 at $12.46. The stop was $9.00, so R = $3.46. Stopped out and reversed to short the week of 1.14.08 (this time by $0.09!) at $27.30. The percentage gain on the trade was 119.1%, and the reward-to-risk ratio was $14.84/$3.46 = 4.29.

4. SHORT the week of 1.14.08 at $27.30. With the stop set at $42.91 the R was $15.61. Stopped out and reversed to long at $36.37 the week of 4.21.08. The percentage loss on the trade was -33.2%, and the reward-to-risk ratio was -$9.07/$15.61 = -0.58.

5. LONG the week of 4.21.08 at $36.37. The stop was $22.49, so R = $13.88. Stopped out and reversed to short at $22.24 the week of 9.29.08. The percentage loss on the trade was -38.9%, and the reward-to-risk ratio was -$14.13/$13.88 = -1.02.

6. SHORT the week of 9.29.08 at $22.24. With a $34.59 stop the R on the trade was $12.35. Stopped out and reversed to long the week of 3.23.09 at $18.32. The percentage gain on the trade was 17.6%, and the reward-to-risk ratio was $3.92/$12.35 = 0.32.

7. LONG the week of 3.23.09 at $18.32.  The stop was $11.34, so R = $6.98. Closed at $146.81 last week with a $115.48 stop. The percentage gain on this trade is 701.4%, and the reward-to-risk ratio is $128.49/$6.98 = 18.41.

Scorecard:
Winning Trades: 4 | 57.1% | $37.24/share avg.
Losing Trades: 3 | 42.9% | -$8.70/share avg.
Average Trade: Gain of 108.2% | $17.55/share | Reward-to-Risk Ratio (R): 3.00

Friday, April 15, 2011

Juniper Networks, Inc. (JNPR)

1. SHORT the week of 1.23.06 at $17.48. With the stop set at $23.31 the initial risk (R) on the trade was $5.83. Stopped out and reversed to long at $16.17 the week of 9.18.06. The percentage gain on the trade was 7.5%, and the reward-to-risk ratio was $1.31/$5.83 = 0.22. 




2. LONG the week of 9.18.06 at $16.17. The stop was $12.15, so R = $4.02. Stopped out and reversed to short the week of 1.7.08 at $26.60. The percentage gain on the trade was 64.5%, and the reward-to-risk ratio was $10.43/$4.02 = 2.60.

3. SHORT the week of 1.7.08 at $26.60. Using $36.06 for a stop, the R on the trade was $9.46. Stopped out and reversed to long at $22.33 the week of 4.20.09. The percentage gain on the trade was 16.1%, and the reward-to-risk ratio was $4.27/$9.46 = 0.45.

4. LONG the week of 4.20.09 at $22.33.  My stop was set at $14.80, so my R was $7.53. Stopped out and reversed to short (by just $0.39) the week of 6.1.10 at $24.67. The percentage gain on the trade was 10.5%, and the reward-to-risk ratio was $2.34/$7.53 = 0.31.

5. SHORT the week of 6.1.10 at $24.67. The stop was $31.35, so that means R was $6.68. Stopped out and reversed to long at $30.01 the week of 9.13.10. The percentage loss on the trade was -21.6%, and the reward-to-risk ratio was -$5.34/$6.68 = -0.80.

6. LONG the week of 9.13.10 at $30.01. The stop was $24.14, so R = $5.87. Closed last week at $38.32 with a stop at $35.64. The percentage gain on this trade is 27.7%, and the reward-to-risk ratio is $8.31/$5.87 = 1.42.

Scorecard:
Winning Trades: 5 | 83.3% | $5.33/share avg.
Losing Trades: 1 | 16.7% | -$5.34/share
Average Trade: Gain of 17.4% | $3.55/share | Reward-to-Risk Ratio (R): 0.70

Thursday, April 14, 2011

Research In Motion Limited (RIMM)

I'm not entirely sure that trading Research In Motion is worth the headache, but it certainly does make one of the central tenets of profitable trading very clear: it's not how often you're right or wrong, it's how much money you make when you're right, and how much money you lose when you're wrong. 

1. LONG the week of 5.19.03 at $3.34. With a $2.44 stop the initial risk (R) on the trade was $0.90. Stopped out and reversed to short at $21.78 the week of 2.22.05. The percentage gain on the trade was 552.1%, and the reward-to-risk ratio was $18.44/$0.90 = 20.53. 



2. SHORT the week of 2.22.05 at $21.78. With the stop at $29.63 the R was $7.85. Stopped out and reversed to long at $27.71 the week of 3.14.05. The percentage loss on the trade was -27.2%, and the reward-to-risk ratio was -$5.93/$7.85 = -0.76.

3. LONG the week of 3.14.05 at $27.71. The stop was $18.16, so R = $9.55. Stopped out and reversed to short at $22.77 the week of 9.26.05. The percentage loss on the trade was -17.8%, and the reward-to-risk ratio was -$4.94/$9.55 = -0.52.

4. SHORT the week of 9.26.05 at $22.77. With the stop set at $28.46 the R was $5.69. Stopped out and reversed to long at $26.87 the week of 3.6.06. The percentage loss on the trade was -18.0%, and the reward-to-risk ratio was -$4.10/$5.69 = -0.72.

5. LONG the week of 3.6.06 at $26.87. The stop was $20.03, so R = $6.84. Stopped out and reversed to short the week of 5.15.06 at $22.50. The percentage loss on the trade was -16.3%, and the reward-to-risk ratio was -$4.37/$6.84 = -0.64.

6. SHORT the week of 5.15.06 at $22.50. With a $28.73 stop the R on the trade was $6.23. Stopped out and reversed to long at $26.67 the week of 8.14.06. The percentage loss on the trade was -18.5%, and the reward-to-risk ratio was -$4.17/$6.23 = -0.67.

7. LONG the week of 8.14.06 at $26.67.  Using $20.70 for a stop, the R = $5.97. Stopped out and reversed to short at $106.95 the week of 9.2.08. The percentage gain on the trade was 301.0%, and the reward-to-risk ratio was $80.28/$5.97 = 13.45.

8. SHORT the week of 9.2.08 at $106.95. With the stop at $148.89 the R was $41.94. Stopped out and reversed to long at $59.29 the week of 3.30.09. The percentage gain on the trade was 44.6%, and the reward-to-risk ratio was $47.66/$41.94 = 1.14.

9. LONG the week of 3.30.09 at $59.29. The stop was $33.68, so that means R was $25.61. Stopped out and reversed to short the week of 10.26.09 at $58.73. The percentage loss on the trade was -0.9%, and the reward-to-risk ratio was -$0.56/$25.61 = -0.02.

10. SHORT the week of 10.26.09 at $58.73. With the stop set at $77.33 the R was $18.60. Stopped out and reversed to long at $75.34 the week of 3.8.10. The percentage loss on the trade was -28.3%, and the reward-to-risk ratio was -$16.61/$18.60 = -0.89.

11. LONG the week of 3.8.10 at $75.34. The stop was $60.87, so R = $14.47. Stopped out and reversed to short at $52.23 the week of 6.21.10. The percentage loss on the trade was -30.7%, and the reward-to-risk ratio was -$23.11/$14.47 = -1.60.

12. SHORT the week of 6.21.10 at $52.23. With a $69.59 stop the R on the trade was $17.36. Stopped out and reversed to long the week of 10.25.10 at $56.92. The percentage loss on the trade was -9.0%, and the reward-to-risk ratio was -$4.69/$17.36 = 0.27.

13. LONG the week of 10.25.10 at $56.92. Using a $42.68 stop, the R was $14.24. Stopped out and reversed to short at $54.78 the week of 4.4.11. The percentage loss on the trade was -3.8%, and the reward-to-risk ratio was $2.14/$14.24 = -0.15. 

14. SHORT the week of 4.4.11 at $54.78. The initial stop on this trade calculates to $67.68, so the R is $12.90. 

Scorecard:
Winning Trades: 3 | 23.1% | $48.79/share avg.
Losing Trades: 10 | 76.9% | -$7.06/share avg.
Average Trade: Gain of 55.9% | $5.83/share | Reward-to-Risk Ratio (R): 2.22

Wednesday, April 13, 2011

VMware, Inc. (VMW)

It looks like this one is going to cost me a few dollars, but honestly, right now I have the feeling I'd like to just take the hit and get reversed to long before next Tuesday's earnings report.

1. SHORT the week of 1.28.08 at $57.85. Using $102.22 for a stop, the R was $44.37. Stopped out and reversed to long at $30.70 the week of 4.13.09. The percentage gain on the trade was 46.9%, and the reward-to-risk ratio was $27.15/$44.37 = 0.61.



2. LONG the week of 4.13.09 at $30.70. The stop was $19.85, so R = $10.85. Stopped out and reversed to short at $74.81 the week of 3.14.11. The percentage gain on the trade was 143.7%, and the reward-to-risk ratio was $44.11/$10.85 = 4.07.

3. SHORT the week of 3.14.11 at $74.81. With my stop set at $93.42 the R was $18.61. Closed last week at $82.77 with a $93.39 stop. The percentage loss on this trade is -10.6%, and the reward-to-risk ratio is -$7.96/$18.61 = -0.43.

Scorecard:
Winning Trades: 2 | 66.7% | $35.63/share avg.
Losing Trades: 1 | 33.3% | -$7.96/share
Average Trade: Gain of 60.0% | $21.10/share | Reward-to-Risk Ratio (R): 1.42

Tuesday, April 12, 2011

Ctrip.com International Ltd. (CTRP)

1. LONG the week of 6.14.04 at $4.25. The stop was $2.96, so that means the initial risk (R) on the trade was just $1.29. Stopped out and reversed to short at $4.72 the week of 2.14.05. The percentage gain on the trade was 11.1%, and the reward-to-risk ratio was $0.47/$2.96 = 0.37.



2. SHORT the week of 2.14.05 at $4.72. With the stop set at $6.51 the R was $1.79. Stopped out and reversed to long the week of 5.23.05 at $6.11. The percentage loss on the trade was -29.4%, and the reward-to-risk ratio was -$1.39/$1.79 = -0.78.

3. LONG the week of 5.23.05 at $6.11. The stop was $4.64, so R = $1.47. Stopped out and reversed to short at $23.68 the week of 6.16.08. The percentage gain on the trade was 287.6%, and the reward-to-risk ratio was $17.57/$1.47 = 11.94.

4. SHORT the week of 6.16.08 at $23.68. Using $32.17 for a stop, the R was $8.49. Stopped out and reversed to long at $15.87 the week of 4.20.09. The percentage gain on the trade was 33.0%, and the reward-to-risk ratio was $7.81/$8.49 = 0.92.

5. LONG the week of 4.20.09 at $15.87. My stop was $10.74, so the R = $5.13. Stopped out and reversed to short at $39.49 the week of 2.14.11. The percentage gain on the trade was 148.8%, and the reward-to-risk ratio was $23.62/$5.13 = 4.60.

6. SHORT the week of 2.14.11 at $39.49. With the stop set at $50.64 the R was $11.15. Closed last week at $45.70, just $0.56 below my $46.26 stop. The percentage loss on this trade is -27.2%, and the reward-to-risk ratio is -$6.21/$11.15 = -0.56.

Scorecard:
Winning Trades: 4 | 66.7% | $12.37/share avg.
Losing Trades: 2 | 33.3% | -$3.80/share avg.
Average Trade: Gain of 70.6% | $6.98/share | Reward-to-Risk Ratio (R): 2.75