2016 was an active year generating record-breaking results.
3 sources for trade initiations:
· Twitter. Entry price calculated based on closing price the day before my Tweet.
· Seeking Alpha. Entry price calculated based on closing price the day before publication on Seeking Alpha.
· Trading Network. Entry price calculated based on closing price the day before network traders were alerted.
· Amedica: Tweet: $.77 to $1.65 after market. 114% gain.
· New Age Beverage: Tweet: $.68 to $5.50. 700% gain.
· Cynapsus: Seeking Alpha: $11 to $40.50 buyout. 268% gain.
· Marathon: Seeking Alpha $1.77 to $3.44. 94% gain.
· VirnetX common stock: Seeking Alpha: $4.12 to $10 after market. 142% gain.
· IntellaPharma: Trading Network: $1.61 to $3.67 after market. 127% gain.
· Catasys: Trading Network: $.30 to $1.55. 416% gain.
· Acacia: Trading Network: $5 to $7.30 after market. 46% gain.
· VirnetX calls: Trading Network: $.65 to $2.25. 246% gain.
· Titan pharmaceuticals: Trading Network: $2.92 to $9.40 after market. 221% gain.
· Aeropostle calls: Trading Network: $.05 to $.10. 100% gain.
2016 Average gain per trade: 224%.
Note: New Age Beverage trade was originally initiated in the Trading Network at $.28 which generated a 1864% gain, however I did not use this gain in calculating the 2016 average gain per trade.
Off book trades
I participated in these trades, but no other traders were alerted due to minimal due diligence and high risk. Since no other traders were alerted these trades are not included in my results.
· Lending Club: I got in at $5, it dropped to $3.44, rose to $7.14, I exited with a modest profit.
· Baidu: 134% gain on short-term call trade. Numerous other by due option trades just above breakeven. Overall a very good trade.
· UVXY: leveraged VIX, traded many times in 2016, some profits, some losses, but overall a losing trade, fortunately on a small scale. Predicting when the market will correct has proven to be gambling, not trading.
· Unnamed microcap: initiated position at $.06, sold at $.44. I'm not revealing the name of this company as I may be publishing full due diligence if share price drops.
The worst trade of the year
I'm not going to mention the ticker because I will be suing the company, but I lost 100% on an options trade and took a big hit on the common. Fortunately this was an off book trade and no one in my Trading Network was alerted.
The biggest one that got away
After completing my due diligence on Sarepta I did not take a long position when it was trading at $8 because I did not believe it would receive FDA approval. I was wrong. After considerable political pressure, the FDA went against the advisory committee and approved the company's lead drug. The stock rapidly traded up to $63. This one taught me the power of politics in relation to the FDA.
I didn't always pick the bottom
As you can see I often missed the bottom, as was the case with VirnetX, which had a $1.95 low, and a $10 high, and my Seeking Alpha analysis was published at $4.12. The same thing occurred with Lending Club, getting in at $5, to watch it fall to $3.44. With patience I exited with a profit.
What is the Trading Network?
The Trading Network is a group of full-time professional traders. When I alert any of these traders to one of my trades, it is entered as a Trading Network trade.
The Trading Network has been part of my strategy for years, but this is the first year I've included these trades in my results. The average gain per trade without including Trading Network trades is 268%. In other words, the average gain per trade including Trading Network trades was 224%, so the Trading Network did pull down the results however given the large number of trades in the Trading Network, I felt it was important to include these results.
2016 was the best year in my trading history, with an average gain per trade of 224%, beating my previous best results of 210% for 2011. Just to give you some perspective, last year's average gain per trade was 72%.
Overall, off book trades performed poorly compared to Seeking Alpha, Trading Network, or Twitter trades. Given that the primary difference is minimal due diligence for off book trades, this makes a strong case for a high level of due diligence, which in my strategy includes a minimum of 100 hours to 200 hours per trade.