Looking back over 5 months of SA Watchlist trade ideas

By Garth Mackenzie (31 July 2024)

61% winners

33% losers

6% breakeven

9% still open

Potential 86% return in 5 months based on 1:2 risk to reward assumption

I decided to take a deep dive and look back at the past 5 months of SA Watchlist trade ideas. This is a report that I publish every Friday. The process is to scan through all the charts in my watchlist on the JSE and to tease out the technical setups that are looking the best. These are then placed onto a focus list to monitor for potential trade opportunities based on the technical strategy suggested.

These are unbiased analyses of JSE listed stocks and can be either long or short.

I usually publish a list of 5 or 6 stocks to monitor each week.

Those of you who know me and have followed my work for a long time will know that I’m generally humble and won’t blow my own trumpet. I know just how quickly the market can humiliate arrogance. But I can’t help being pleased with the trading calls that I’ve published in the SA Watchlist over the past 5 months.

Since the beginning of March 2024, I have published 111 trade ideas in the SA Wacthlist.

• Of those, 97 met the criteria to initiate a trade entry.

• 59 of those resulted in wins with the price targets being met (61% winners)

• 32 of those were stopped out for a defined loss (33% losers)

• 6 closed for a break even after initially working but then failing to reach the target (6% break even)

• 5 of the trade ideas are still open (and working) so their results are not concluded yet.

A 61% win rate is pretty decent by my standards. That’s around 2 out of every 3 trades as winners.

If one makes a conservative assumption that you’d assumed a capital risk of 1% on each of these trade ideas, and that the winners all generated a 2:1 reward to risk ratio (many were much better than that), then it means that your winners made 118% of capital and your losers cost you 32% of capital for a net total return of 86% in 5 months.

This is theoretical, and I’ll admit that I don’t like marketing that splashes these kinds of numbers across the headline. But these are the facts based on back testing of the past 5 months’ worth of discretionary trading ideas published here each week.

Looking back over past trades is always a good practise and should be done by all traders periodically as part of a process of learning and improving.

In that respect, I made some useful observations when looking back over the past 5 months of SA Wacthlist ideas:

I noticed that many of the trades that were stopped out actually went on to work a little while later after they were stopped out. This reminded me of something Steven Goldstein said to me when I was on his trader performance coaching program. He said that in his own experience, he watched his trades that were stopped out and then recovered to start working a short while later, and he re-entered those trades. It meant that his idea was right but his timing was a bit early. Often those trades that were re-entered went on to be big winners.

In my own observations of the trades I’ve covered here, I noticed that too. The ones that were stopped out and then recovered back above the stop loss level actually worked out nicely in many cases. Re-entering those trades here would have enhanced the performance further.

The best trades were often the ones that started to work out quickly. This has been my experience throughout my trading career and is a well-covered observation from other traders I follow too. The best trades usually start to work almost immediately.

As always, the stop losses needed to be adhered to in order to contain losses. That is the key to consistent success as a trader. Keep the losses under control and allow the winners to work and run.

Here's a summary list of all the SA Watchlist ideas that have been published here since 1 March 2024 to mid-July 2024.

Obviously past performance is no guarantee of future performance. But what I can guarantee is that I’ll keep looking for high probability trade setups, and publish them for subscribers when I see them.

Try a 7 day free trial to get a taste.

Happy trading

Garth Mackenzie

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