The key to July’s swing trading success was in managing the losses and keeping them SMALL!

splash zone swing trading profits and Analysis for july

I did that well, and it is something I am very happy. My winning percentage was right there at my historical average, but I didn’t place as many trades as I usually do. There were only 18 trades made versus a historical average between 25-30. 

There are the few reasons why:

  1. There was a half day of trading on July 3rd, which I usually avoid trading, since usually on those days, the market lacks conviction in direction and volume.
  2. The market was closed on July 4th for Independence Day. So obviously no way to trade then.
  3. From July 19th through the 31st, the market was stuck in a sideways trading pattern with very little action. I still made some trades, but I wasn’t overly aggressive.
  4. Only 19.5 trading sessions in the month of July which was very low. In the month of August there is 23 trading sessions, for comparison’s sake.  

So there were a few reasons why the number of trades were less than what we have seen on average.

Nonetheless I was pleased with the results. So let’s take a look!

splash zone swing trading profits and Analysis for july 1

As I already mentioned, the win-rate was at 56%. I was stopped out of my last trade that I placed on July 31st in S&P 500 3x Bearish ETF (SPXU) at $14.52 on August 8th. About an hour later I jumped back in at $14.51 realizing the market wanted to suddenly sell-off again (SPXU is currently trading at $15.08). That was a good move on my part to get back in, but such a decision won’t be reflected in July’s results, but in August’s results, instead. 

Nonetheless, here’s the breakdown of where my profits came from:

  • I was profitable on 10 out of 18 (56%) of my trades.
  • 9 out of 14 (64%) of my trades were profitable that were focused on bullish/long setups
  • 1 out of 4 (25%) of my trades were profitable that were focused on bearish/short setups
  • 2 out of 5 (40%) of my trades were profitable using exchange traded funds (ETFs)
  • 8 out of 13 (62%) of my trades were profitable that were done with trading equities.

Overall, I was satisfied with my performance. You can see that my short trades still were not very easy to make, and few in number.

Also worth noting that four out of five ETF trades I made were done using short bias ETFs, and the only one that was not (IBB), was traded for a profit. So, my long positions had a strong focus on equities.

RELATED: My 2017 Past Performance

But back to my opening comment about keeping the losses small.

That was the key the whole month, because when you look at the trading results, there wasn’t any one single home run trade that I made. Instead it was a number of trades that came together to create the entire picture for me. But the profits were realized by keeping the trades that didn’t work out to where they were just small losses. 

My biggest losing trade on the month was for -1.6%


My biggest winning trade on the month was was for 4.7%

So the case can definitely be made that I didn’t have any large winners, we’ve alreayd discussed that, and that is okay, but look at the difference between my biggest loss versus my biggest winner. That is almost 3 times the amount in profits as there were in losses between those two trades.

Coupled with a 56% win rate, it doesn’t matter how big your profits are, when you can keep the losses small relative to the winning trades, you’ll find yourself doing well in the stock market.

Most traders though won’t even think about this aspect of trading. They want the big home run trades, the one they can call up their friends and brag about.

But winning in the stock market is done by keeping your losses small and your winners big, and what the difference between the two is.

That is why, if you can maintain a consistent 2:1 reward-to-risk profile on your trading, you will do very well in the stock market.

splash zone swing trading profits and Analysis for july 2

The good and the bad of my swing-trading

I like to be hard on myself for how I trade each month and to make sure I learn from my mistakes along the way. These monthly posts provide me with a great outlet for doing so and building upon my experiences of the last month.

So what worked for my swing-trading:

  • Being long on the market
  • Trading Equities
  • Biotech ETF
  • Specialty Retail
  • And to a lesser degree…tech stocks.

Alibaba (BABA) has been, by far, my favorite stock to trade, so far this year. It provides great setups, and it follows through on them very well. Definitely, the best stock I have traded all year long. For July, I traded it twice and was profitable both times, and also took home the month’s biggest winning trade at 4.7%.

Biotech’s ETF (IBB) has been in the top five of stocks I have traded this year. Solid setups with some beautiful follow through. One thing I have learned though, is to raise the stop-losses, because it can quickly turn against you if you don’t keep moving up the stops.

Tech stocks were okay, but didn’t give me much to brag about. Being long on equities for pretty much the whole month, was huge.

This is what did not work for my swing-trading:

  • Being short
  • Banks
  • Everything that wasn’t in the Tech sector or Specialty Retail industry.
  • ETFs

SPXU definitely won’t win any awards for July, as those were trades mainly to hedge against the profits in my existing portfolio and was the main reason why the ETFs really didn’t work well for me in July, if you don’t count IBB in that mix.

Banks are hit and miss. They set up really nice, but they just don’t give you the follow through you’d like to get from them. That is always frustrating for me, because for most of this year, they have provided some nice setups, but stocks like Goldman Sachs (GS) just hasn’t been the greatest of stocks to trade. Bank of America (BAC) has been the best stock for me when it comes to trading the banks, and will be the one I focus the most on going forward.

For the most part I stayed away from the semiconductors in July. I had a scratch trade in Micron Technology  (MU) but outside of that, I kept my distance. Every time I looked at their charts, I just couldn’t find a setup I liked. I have also found that semis have been very hit or miss over the last two months. Earlier in the year they could provide some of the best trade setups that the market had to offer, but at this point, I wouldn’t consider that to be so.

A peak into August…and what I’ll be doing

First I want to continue the success that I saw in July. I’d like for my winners to be a little bit bigger, while keeping similar average losses. The sideways trading that ended the month of July, has been the case for much of August. As long as North Korea continues to saber-rattle the United States, I think it will provided for continued shorting opportunities.

If we stay in the range we have been trading in, it will require a more neutral portfolio while aggressively profit-taking on the winning trades.

If you are struggling with your trading and want to make your portfolio a profitable one, I would encourage you to join me in the SharePlanner Splash Zone (FREE 7-Day Trial) where there is a community of traders doing battle with the market every day and succeeding at it. I am in there as well, and provide all my trade alerts in real-time to each trader. I also provide them via text and email for when you are on the go, or can’t watch the chat room.

Learn to become consistently profitable in the stock market: Join the Splash Zone!