Oh, and here's a summary of my day trading since the start:
By the 2nd trading day, I was losing 2% consistently each day. Was it my trading style? I have evidence to believe so. Specifically, I shouldn't have played with entries and exits. Also, I think my cash was being eaten by brokerage because I diversified too much.
As you can see, I would have done better if I didn't worry about entries and exits. This is where I need to focus on picking stocks that will rise.
How was the liquid stock market at this time?
The ratio of max gains:gain from open is big, which indicates to me that most stocks were hammer doji's, which means that, in this environment, the only way to day trade is to catch a falling knife - not my style of trading.
Now here's where it gets interesting - Did I outperform the market in selecting stocks? Yes, until recently. Here's how my picks compared to the index.
Up until the 5th, my stock picking outperformed the index - after that, I was outperforming, but not by much.
These charts also tell an interesting story:
1) My buy and hold strategy was better than the market up until the 5th
2) My stock picking has become gradually worse over time, as indicated by both buy and hold, and max gain.
Where to from here? I don't want to 'trade the index' by 'catching a falling knife', so I'm trying to create a list of stocks that have a good buy and hold strategy. Going back to my original trading strategy sounds like a good idea at first. But the trouble is that my original idea is too diversified, and I'm not able to pick the best winning stock.
Hence, I am now going to use a correlation indicator to help me see the correlation of winners from the previous days and today. I hope to be able to get the trend of the market and pick days where there is a high correlation. In that way, I have a higher chance of my buy and hold strategy working in this environment.
