As stated in the first article for the GTC Sample Portfolio, we’re keeping our quantitative processes private, but will share the moves we make on an actual portfolio. And please note our risk statement.
So we posted our most recent thoughts on Kroger (KR) the other day. In the post, we had mentioned:
“… a position could be initiated at these levels …”
and …
” … I’d simply buy the shares I’d wish to purchase at these levels …”
Ok.
But you you will notice that we did not put out an article announcing the purchase of Kroger (KR) at those levels, on Friday. And to be sure, we generally will not put anything in that sample portfolio, without …. well … basically a post like this. So what’s up? Why didn’t we announce that we were putting Kroger (KR) in the sample portfolio Friday? Well, this ties into another article.
As well, recently, “The Baron” posted his thoughts on Trading and Gambling. He made a statement …
” … You cannot control getting a ‘best’ entry price or a ‘best’ exit price or moving a stop to a ‘best’ stop price. There is no way to know the ‘best’ prices for anything. If you happen to get a ‘best’ price, it was just luck like in any casino game …”
As we watched Kroger (KR) climb on Friday? And there was a thought.
We are going to demonstrate the truth of the words in The Baron’s article, with this purchase of Kroger (KR).
We do want a ‘qualifying’ statement here. To be sure, there are processes, where more ‘exactitude’ in the purchase price does matter in the success and overall positive expectancy of the process. But the principle of the above statement cannot be overstated to new traders. We have listened to new traders, for decades. And they all seem to fall victim and prey to this hyperfocus on the importance of “entrances” of “the ‘best’ price”. As if that is the end all be-all of trading.
It isn’t. In fact, ‘entrance price’ can fall nearly to the bottom of the list, in terms of importance and viability of a trading methodology. Once the other factors of a methodology is known, aside from the purchase price, then one can determine the viability of the process.
There are many, and very real reasons this is the case. But getting back to the point here a bit? There was the decision to delay buying Kroger (KR) for the sample portfolio earlier in the day, to illustrate the above truths. Not to simply be flippant (which at times, we assure you we can be) … but to highlight that it is more important to know your process, than to hyperfocus on entrance. The process, be it discretionary or quantitative, is what needs the focus, and gives the positive expectancy to any approach to the market.
So all of the above is to explain, only now … why we can say that we are purchasing Kroger (KR) for the sample portolio, not at the best price, but 13 shares at the price of $45.92. The high of Friday. Not to even look to try to bag a fill at a lower price in pre-market. But we are picking the absolute high of Friday, as our fill.
As we move forward in time, to the next iterative event. Remember, each week has the $35.00 capital deposit added to the account. We will have more details and specify exact performance numbers as the portfolio is built, in future posts.
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Disclaimer: None of the thoughts or posts at GTC Traders / gtctraders.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. GTC Traders simply writes such articles to delineate their thoughts for their own edification. All thoughts posted are simply individual thoughts as to process as of the time of writing, and are subject to change without notification to readers of this website. Stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of stocks and options may fluctuate, and, as a result, any trader may lose more than their original investment; especially in the case of the use of options. Any content on gtctraders.com should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make.