u/seh0872

Earlier this year I implemented what I called a momentum trend strategy -- maybe an elongated swing-trade type approach entering positions based on confirmed trends (SMA), momentum health (RSI), velocity (MACD) and breakout (Donchian). Moving along nicely with rising trends, but struggled with flat trends like in April.

Last week, however, I was up 1.5% over the S&P with minimal realized gains ... then my trailing stops (set at ATR(14) x 2.5) exploded my profit ... auto-liquidating 70% of my holdings coming off their highest high ... and took 100% of the year's profit with it--essentially now flat with the S&P after tax. 12 of 13 exits on trailing stops rather than my signal decay gates is ... not how I intended this approach to work.

It has caused me to take a serious pause in how my strategy operates as markets turn sideways ... not quite officially a regime change, but enough to trigger stops. Sure, I preserved profit, but its pointless if the turnover creates tax liability that eats most of that profit.

I've read a little on this board that swing trading often works well (and can be consistently profitable) during defined trends, but in the chop "knowing when to do nothing" may be key. I'd like to know more.

Do you set trailing stops? If so, do you use a multiplier like I was doing? Do you volatility adjust them? Do you let them be auto sell, or wait for EOD confirmation? If you don't use them do you protect downside risk another way?

And, perhaps more importantly, how do you control turnover and tax efficiency? For example are you doing partial exits? Holding through the downswing? Exiting all, taking the tax lump, and sitting on cash waiting for the trend to firm up? (Again please note this isn't about regime change ... we are still in a Bull Market - and a quiet one at that.

A lot more I could share, but I'd love some serious discussion about how you seek to manage profit over your benchmark in a taxable account.

TIA

Keep reading about max risk per trade (generally 1%) and position cap limits (generally 10%). In today's market, deploying both of these causes 80%+ of entry positions to be subject to the cap.

Are you deploying both in your position sizing? Because I'm trying to learn here, and when I do the math, virtually all (say 80%) of positions will be subject the cap. That just seems ... off to me.

A hundred posts in this but I can’t find the right solution. In the flight now. Phone…no problem. MacBook … nope. Happened last time I flew too

Delete network try again. Nope.

Try chrome nope

Try safari nope

Try Arc. Nope

I’m out of ideas.

Wondering why my pass-through fees at Schwab were so freaking expensive compared to what they used to be ..... a sale on an ETF in April vs March yield a 500% increase in the fee .... yes, that's real -- 500% more.

Turns out what is driving is the SEC's §31 fee which in March was $0 and is now $20.60 per $1M. On my $50,000 trade, that $1.03 that was not there before.

Nothing Schwab can do about that ... but it does make me retreat to a question I had when I first came here ... is the passthrough of these fees common? I came from Vanguard last summer where .... no fees. Whatever exchange fees Vanguard was charged, they absorbed it.

But that is my only perspective. Maybe Vanguard is the outlier. Thoughts?

Now is 2/1000 of a percent enough to drive me away or significantly thwart my investment strategy due to the extra drag? No. But is it annoying as hell? Yes -- because I'm estimating this is going to run me somewhere between $250-400 per year for the privilege of trading.