Wednesday, December 29, 2010

Volume weighted average price VWAP


When I started trading I followed all kinds of people online, in chat rooms, net forums, blogs, sites. One of the most consistent, with regards to message, was Brian Shannon of alphatrends. He first had a blog, alphatrends.blogspot if you are going to search for it. He explained things, shared some insight, provided some big market perspective. He talks about VWAP in the following manner at this link VWAP alphatrends

"Consider a market maker with a day order to buy 1 million shares of a stock for an institutional customer. The market maker cannot just go in and buy the full position in the first two hours of the day and then leave his desk to go play golf. Market makers are evaluated by their customers for the quality of trade execution; did they get a fair price for the customer? The most common method of used to analyze the quality of a trade execution is to compare the price the order was filled to the Volume Weighted Average Price (VWAP). The VWAP is calculated by dividing the dollar volume of a stock by the share volume over a given period of time. Simply put, the VWAP is the average price that each share was executed over the period of time being studied. There are several ways to calculate the VWAP in RealTick, the analysis and trading software I use. I prefer VWAP analysis with a moving average, in particular for shorter term day trades on a one day chart of the equity I am trading.

The VWAP is considered to be a fair benchmark for comparison of the institutional trade desks ability to execute trades on behalf of the customer. If the brokerage purchases were made at a price less than VWAP then they did a good job for the customer. If the price paid was greater than the VWAP they may lose that customer for future transactional business. The daily VWAP is a number which changes as orders are transacted at varying prices throughout the day. "

So the way I try and think of things is how I stack up against the competition be it you, Fidelity, the market makers, etc... While I do not aim to beat the VWAP, it can be used for timing of entry and exits. One such explanation again comes from the old alphatrends: VWAP strategy

Here is how I thought of a stock and VWAP today. If you click on the chart you will see larger version of VMWare chart. I have followed this stock for a while. Price went down at the open, kind of double bottomed around 1140, came back above VWAP, and is now right about there. Given the quiet market, lack of strong recent trend in the stock, don't you think it will close around the VWAP for the day? Knowing this, oculdn't it have been bought around the double bottom point, sold once above VWAP, perhaps even shorted it above the VWAP?

IMO, VWAP can be used with success for daytrading in this manner and for timing of entry and exits for trend traders and investors.

Monday, December 20, 2010

IPOs and following my own advice

I might stop following IPOs so closely or at least evaluate if I trade them. I bought one after it was out a couple of weeks, bent my loss rules as I hoped it would come back my way. Too risky.

I am back in several old and very old favorites with the idea that I could sit with them for a while. These are the kind of picks I would offer to family, not necessarily growth standards...

Thursday, December 16, 2010

Buying dip ideas



Requires regular review of stocks and ETFs.

On IBD DGO/MS, might closely resemble buying bottom of a channel.

For now, tough to decide on an exit. Holding for months might yield better than shorter term.

Better if in an overall uptrend where 50>200

Lower bollinger band touch, especially with a tail, is nice.

I'd rather stick with what I have followed, am familiar with, and is a good quality issue.

Tough to judge but it appears that after a big breakdown might need to touch upper band then the lower. When it then touches the lower band a 2nd time buy and hold is easier.

Can't ID intraday well, better to wait for end of day data or be aware of a first hour plunge/shakeout. Do not catch an intraday knife with hopeful hands.

Wednesday, December 15, 2010

Getting back in the saddle


I am kind of doing some research. I am not overly excited about it in an emotional manner so perhaps it is good stuff. When I get all worked up on an idea, ie whipped in a frenzy, I tend to make bad or brash decisions. What I am doing is looking at a lot of charts of growth stocks and deciding on better entries. I've had a tough time holding onto some great stocks when getting shaken out. I've thought about identifying leading issues, think about my own classic entries, think about when I would sell out, and then identify better entry point after that obvious shakeout. Kind of a mass market psychology observation. This involves buying when there is fear in the street.

I am trying to get some rules or guidelines together through visual back testing of charts. Really just a collection of ideas and observations.

I am not sure if I will use this to buy and hold (something I have had a tough time doing), or hit a whole bunch of singles over and over.

Click chart to see one such stock, my entry was 27.39, exit 29.7

Wednesday, December 1, 2010

Update

Well the C trade went too far against me. It was a reminder of many good trading principles. I took some time away after that one, just watched things a little bit. My sense of the overall market a week or two ago is that we would yank some chains around but finish the year without going up or down much. We will see what the month brings, though it is not the month that matters.

I saw an option opportunity this am, took it with reasonable size and made a little.

Monday, November 22, 2010

Buy and hold?


I see lots of equities I used to own doing well today. I really wish I better remembered trading near turkey day from years past to have some idea of the ebb and flow of things. I do not keep good track of that sort of thing, perhaps I should. I'd started a simple notebook of market action, tracking indices, VIX, Tick, mainly with the idea of capturing some explosive moves off bottoms and tops. If I kept this up for years maybe it would be easier to look back. This web journal really does not delve into that kind of rhythm reading yet. Hmm.

It is not quite trading related but I passed my orange belt karate test this past weekend. This requires dedication and effort that I hope will reflect well upon my trading. The next belt is green and will require more.

Wednesday, November 17, 2010

Good reads

Follow these links for some good reading.

http://www.tradinggoddess.com/2009/03/trading-mindset-common-psychological.html

http://weeklyta.blogspot.com/2009/02/tying-yourself-down-personal-experience.html

Another good trade


Market not right at the present. Daily chart candles suggest move up over for now, 2 days ago big price spike up with close near the low along with lower action yesterday is what had me preserve profits. Percentage wise this is one of my best in months. Click chart for larger image. FYI, these charts are always basic, I follow a few more things like moving averages to decide on trade entry, also some measure of volatility to decide on trade size. I did not follow this strictly on this issue, in fact, when I first decided to enter stock, I proposed a tighter stop for others, and was thinking more like a $21 stop for me, glad it worked.

A few things that I have read about technical analysis and canslim investing suggest that any stock that breaks out of a base and moves 20% in less than three weeks needs to be held for 8 weeks as it might go on to be one of the big market winners. I can look back on my trade history and see plenty of stocks that are higher now than what I paid for them, I will simply just follow this for another favorable controlled risk entry, it has a good story.

Perhaps these short term swing trades should be my specialty? I am doing quite well at them the past few months. I might miss some of the moves at the start and end, but I am banking coin/ringing the register. I want to have the next 3000% stock, but waiting for such a big winner might have me sitting on losses. I need to masticate on my approach to this: go for longer term buy and hold, or stick with short swing moves?

I talked about this stock to two people in my life, not sure how this affected the trade.

Sunday, November 14, 2010

IPO research

Months ago I was keeping good track of IPOs, got quite a list of them. It seemed like some I was following closely at the time have gone on to nice gains. About the time I was getting into futures I stopped this discipline and following. Well today I had it on my list to get back to this research, have now built some watch lists and put some stuff on the quote screens.

At first it seemed like good easy money could be had. One of the key chart patterns I've heard about of late is a Uturn or IPO Uturn. Several IPOs exhibit this, then break out to new highs, generally on better volume with increased or new highs in the RS line. I found many with 10 % gains, other with >60% gains. I got all excited.

But I am the kind of person that has to be careful what I put into my brain. Most of the IPOs were actually very messy in the charts. Many of the issues were tough to believe in on a fundamental level. Much pain could be had.

I will continue to keep my eye on select IPOs, those with good stories with room for exponential growth, those that large institutions would buy and hold for years.

Trading is a lonely pursuit

This am as I put in some honest time reviewing charts I am struck by the utter loneliness of this pursuit. I want to exchange ideas with like minded people. I want to share my insight, I really feel like I am finding some great charts with tradeable patterns setting up. I want to share with my coworkers, my spouse, my family, those on net forums. But they do not share my interests. Even those on the computer like me think much differently, do not appreciate the way I do things.

I guess in a way, I want to avoid the work that needs to be done and just sit around and talk about stocks. But the meat in the middle is found by doing the hunting, putting in the time. This systematized approach is what yields results.

Tuesday, November 9, 2010

Hopeful



This trade entails more risk than I have been taking of late. It will be volatile in the next hour and then after hours. I might be better off walking away and holding this one for years. I took a look at options but they only go out to Jan 2012 which is the earliest time they will put out new cheaper model car.

Think about this IPO. They are using the money to buy and build new products for market. They in many ways are the first entry in this field. They are partnering with Toyota and Mercedes. This could be a game changer.

Now that I've gathered all this evidence we will have to see if I let it affect my trading.

Recent trades


Monday, November 8, 2010

Mahindra Trucks


I have been following for this perhaps 30 mpg truck to be released in the US, got this email last week. It is an interesting tell on aspects of the economy.

Good Morning Mahindra Truck Fans,

Congratulations. You are part of over 30,000 signed up to be the first to experience the hardworking Mahindra trucks.

I know you are wondering when you will have the opportunity to get behind the wheel of one of these amazing, authentic, robust, fuel-efficient trucks at a Mahindra dealer near you. While I cannot give you a firm answer on timing, I can tell you in my estimation, trucks will arrive in the spring of 2011.

Mahindra has applied for and received their EPA (Environmental Protection Agency) certificate, which means the vehicles have passed emission requirements. They also filed with (NHTSA) National Highway Safety Administration, which handles US standards for safety.

With these hurdles completed, it would seem production is imminent, but other factors may hinder the US launch. India’s car sales are on a dramatic trajectory upward. The sales pace combined with an industry wide parts shortage is impacting home market sales, which will have an affect on the United States introduction.

In closing, I know each of you anxiously await the arrival of the Mahindra trucks, and I am confident that you will see a launch announcement in the next few months.

If you haven't seen the Specsheet on the trucks yet, please click on the link below to see it.

Click here to view Specsheet

Or copy and place the following into your browser:

http://mahindrana.com/pdf/specsheet.pdf

Regards,

John A. Perez
CEO
Global Vehicles USA, Inc.
1720 Windward Concourse
Suite 400
Alpharetta, GA 30005

(770) 753-4441 (Office)
(770) 753-4420 (Fax)

www.mahindraNA.com

Friday, November 5, 2010

STICK WITH WHAT WORKS FOR YOU!!!

Awesome recovery here by such focus, now down 0.8% YTD.

Thursday, November 4, 2010

Grasshopper

BIDU


It aint going up and market is having broad rally, I sold out around 111.2. First entry was 101.5, then 104.41, then 110.36. Nice profit. Will continue to follow, I might be wrong but will sleep well. Of note, RSX is doing well with pop in oil. Retirement stuff doing well, trading accounts down 3.6% YTD.

Update and fundamental thoughts

First off, I ended up concentrating all of my holdings into one stock. I got in and out of WYNN with a small profit, it has since gone up. Oh well, so has everything else I had. My equity has retracted in price some but I have decent profit. I was questioning myself the past few days as I had nearly retraced ALL of my losses for the year. Normally when I start counting my money and feeling good it is a good time to take profits off the table. It is a significant amount of money I have paid tuition with this year.

When looking at charts of overall market we have held up nicely, not really fallen apart. I do not often feel one way or another about market movement (feel or think about things is different than chart reading) I think that the election results will put an end to things in our government that many view as creating socialism and uncertainty. With a divided Congress, that which passes must more so be reasonable, good, satisfying, and proper. I think this could serve as a catalyst for further market growth.

Besides, all of the previous quarters expectations were underestimated...

Tuesday, October 26, 2010

Psychology note

When an experienced trader uses tools and resources to make a good trade I think it is important for the trader to commend themselves for good trading and not to think of it as being the tool or resource. Similarly when trades go against you, take the credit for that also, don't blame.

It is about personal responsibility.

Monday, October 25, 2010

Trade update


It is tough to tell if this trade will work out or not. My days off I've been sitting in front of the computer a lot, this can lead to either insight or at times overtrading. Overall this is a leading stock. But I considered the growth chances of this stock versus another, the morning action, and just decided to sell it. It closed below what I sold it for. I just get the sense this one is going down from here. I can't trade senses very well. I moved the money into one of my remaining stocks where it closed up a buck and remains near all time highs. I've noted the action in MOS, it does not matter.

I have another stock that is not moving as well. It came in on lower volume, might come in more. I have little profit in it.

Friday, October 22, 2010

I feel good!

I feel like I am trading adeptly and I am being successful at it. The market was fun to watch today. No music to play, don't want to get giddy or emotional.

Thursday, October 21, 2010

Going with what is working


Of the 4 stocks I bought 3 are working out okay, another was lagging. So I sold the laggard and added to another a few points higher than original stake. With a little more research the stock I sold out of was not even in the top one or two of its group of similar stocks.

Two of my stocks are in new high territory. Two of my stocks report tonight. This is dangerous territory.

I like my chances!

Wednesday, October 20, 2010

Adding

So of the four issues I bought only one was profitable as of yesterday. None of the charts or volume related moves were horrible though several of these are near earnings subject to heavy losses. They are all significantly above 50 day averages. I am monitoring for big down days on volume but expect that I will more so see further accumulation. I added to the one issue with the highest RS.

Tuesday, October 19, 2010

WTF market

Crazy action yesterday with flash crash of SPY, down to 106, not sure what was going on. I still like the market though it does bring more fear in. My guess is AAPL move down about 20 after hours was buyable for a few day swing. I made some nice fast money on BIDU on similar reaction, held for maybe an hour after buying premarket when it took out the post market lows.

One of the issues I bought had a clear breakout, it is one to look to add to. The others are mixed but not broken.

Election year, 3rd year of president helps me to be bullish though the charts tell the stronger story.

Monday, October 18, 2010

Plans

I've done some research over the weekend and I have a buy list of growth stocks. It looks like the market should pull in a bit, I am looking to buy 50% of intended positions in 4 issues, will add to those that work. They are all must have big cap stocks near all time highs.

Sunday, October 17, 2010

A good day trade SDS


SDS is the double inverse of the SP500. This past Friday I entered the day without any ideas, was not really looking to trade. I noted bullish sentiment from others. The market opened up about half a percent for the SP 500, I think it was up 6 points or so. I figured that on options expiry with so many people bullish we just could not continue with a strong morning rally. I entered SDS I think within the first 15 minutes with a mental stop of its low of the day, my target was for it to get back to where the market closed the day before. I thought about just putting in a limit sell order and going about my day. Instead I went about my day with frequent checking of the action. When I saw that my target had been reached I put in to take my profit. My gain was almost twice what I risked.

A good swing trade RSX


I like the benefits of buying breakouts into recent highs. I try to follow ETFs for this purpose, I figure I will not lose 10-20% with an individual stocks bad news or panic (like VMW of late) while being able to participate in clear market direction. INP, an India ETF is one that I missed and is showing nice gains. There can be various means to decide on entry and exit based upon moving averages, chart patterns, and time periods (buy 4 week high, sell 2 week low is one I have read about).

On 10/1 I bought RSX. I've made 20% on this one before. I sold it a few days later for 2.5% gain. RSX seems to trade correlated to the price of oil, I expected that there would be a pullback in oil price, along with a change in some of the market sentiment. It has vacillated around 34 since then, currently just higher than my exit. It remains on my watchlist.

Saturday, October 16, 2010

VMW


I've been following VMW for quite a while now. Tough to examine trades and see what could have been. My first purchase was on 5/11/2010 @61.19, sold later that day 61.06. It retreated further but could have been held, I do not recall what I was doing then. Then I was thinking more about covered calls, looking to pick up a few percent each month with great stocks. I started this on 7/20. The call went against me as the stock grew. I ended up buying back the call and going further out in time. I recall that the profit in stock was greater than the loss of the call price. I think I then sold the stock and covered a profitable call. On options expiry day 8/20/2010 I was long (way over extended) some puts that I lost my arse on. The stock was stronger than I thought so I bought the stock with all I had. I sold after a big down day 10/1 for a nice profit, nearly recovering my options loss.

VMW now only a short. It has busted down on big volume.

It is unsettling to review these and other trades.

If you like trading leading growth stocks, good discussions of stocks are in the new book by Gil Morales and Chris Karcher. It details some history of them at IBD but also shares a lot of their thoughts on stocks through time. It includes better defined buy and sell rules.

I am sorry about the chart, it ought to have volume included but I need to get some other work done, not gonna change it. Pull it up on your own time if you want to see more.

Trading update and randome thoughts

I got into futures for a few weeks and while I felt like I was doing well and could do well it proved to not be so. I closed the accounts and instead of moving the money back to an equity account I put it into checking to pay down some debt. Overall, there is not much debt but before increasing market risk by much it needs to be paid down. That would be for my piece of mind as well as my spouses.

I've also cut way back on my stock trading. I'll try and do some research to show some of the recent worst and best trades. Overall, other than the HEAVY losses from futures, I am likely just below break even for the year. Considering the magnitude of one of the losses I am fortunate.

I think I see a lot traders buying bottoms in stocks. Good luck with that. When a stock breaks down, down remains the path of least resistance.

My broker has a forum. I see a lot of questions. I've come to the conclusion that when one has a question about a stock, trading method, or indicator, one should not be trading. Stop trading until you know! This is different than my futures activity in which I considered it for years before venturing there, then only did what I thought would work. I knew what I was doing, just did not do it well. There is too much money at stake to do what you are not familiar with. If you do not know what to trade, how to research stock, what criteria you are looking for, STOP TRADING. Read more. Get a firm plan to act upon.

This leads to getting advice. When we do not have the answers and are not sure of things it is human nature (at least it is my nature) to turn to others for advice. I think this is why advisory services in their many forms are so popular and can charge so much. It is also why people go to internet forums and chat rooms, because they have not a clue how to handle themselves. I hate not knowing the track record of those that populate the net. They can brag and boast all they want, they can seem to know what they are doing certain days. Even if they do not know what they are doing, by virtue of not knowing what I am doing, it becomes easy to follow them. I do not trust what I read. Sometimes the written word on the net looks like it is designed to confuse and bewilder. While I can sense where some of the net writers are in life, and what their trading results might actually be like, I've taken to considering them as GS janitors being paid overtime to spread disinformation.

Changes in 401K are working out. Many of the charts are looking better.

I like the new Marketsmith package. More bang for the buck.

Saturday, September 25, 2010

401K

Recent moves in 401K are working. I would like an average crossover in coming days where the 50 gets above the 200. The move into a higher high might have me consider moving more retirement funds back to work Monday.

It is odd to take a look at things and ponder if these accounts would have been better off just staying in the market through the past several months. Easy to say in hindsight.

Reading on the internets, those that have sites and blogs seem just as puzzled at market action. Perusing forums, many are scared of being long, and many just do not have faith in market leadership. Many are scared to buy new high breakouts and prefer to catch small moves in broken down stars.

As for myself, I am fearful of not catching and riding big waves up in leadership!!! Sitting tight as they march appears to be the only way to make big money.

Wednesday, September 22, 2010

Tuesday, September 14, 2010

Bullish SPY?


I'd prefer a close above the trendline!

Sunday, September 5, 2010

401K review

I dislike the current market environment, I find it too easy to get emotional and move in and out a lot. I finished one year down 12% doing that, should have had my head on stronger.

I took a look at 401K choices, nearly everything stock based is trading near the moving averages and has the 50 day trading below the 200 day. That to me means stay on the sidelines and wait for a better trend to develop. The one that looks better than the rest is TRREX, chart with the post. I will wait until it gets above an old high near 17.02 to jump the gun much. It is tough to understand how commercial real estate is doing well??? Perhaps I need to research top holdings. All three bond fund choices are doing well, it would be nice to have been in them instead of cash equivalents. I will likely wait and see how the next month plays out for equities to decide if I jump into them. I think my 401K service is only letting me do one trade per quarter, I should have done this a week ago.

Monday, August 23, 2010

Thoughts

Futures stuff not going so great. I was getting into poor habits and counter trend stuff that was killing me. I am going to keep that account open but I need to rethink how I go about it. Get back to my original plan of learning the various markets to take advantage of them in the future.

Market looks sideways to down to me based upon trading ranges and moving averages.

When I reflect back on trades that could have been life changing they were always leading stocks that should have been held for a long time. I am going to try and do that more, how many times have I said this? Perhaps futures foray was good to get me to focus longer term. Intraday stuff really winds me up!

Stay on the leaders!

TMI update: I can tell that the area from which I derive information continues to get smaller and smaller, mostly charts.

I've subscribed to The Economist to try and better educate myself on the world social/political scene.

Sunday, August 8, 2010

update

As things stand now, overall I remain down 1% YTD

Market state

I find myself a bit baffled with what is the real state of the market right now. I am hesitant to put long term money to work as I think the long term trend is still bearish or at least neutral. Different source suggest we have had a 50/200 day bullish cross recently though the way I have some of my charts set up I do not see this. I am not willing to jump on the bandwagon here. What might change my mind would be clear strength to the upside AND then a subsequent pullback.

There have been a number of good performing stocks. I see a few ETFs that are worth considering. But the bulk of my market time is thinking long term while I learn futures platform and I will likely conserve capital. If I miss some bull, so what.

Book review, brief July in reveiw

Nora Peterson wrote a book called "Retire Rich with your self directed IRA". IT talks a lot about real estate investing using an IRA. The basics of the book suggests that one can open a trust account, have the trust holder invest your money in things other than what is traditionally available. I do not think that the real estate thing is for me, she seems to advocate working hard to buy foreclosed properties, buy options, and other things that I do not want to do. However, the book does open a new world for retirement account investors.

My newest broker supports futures trading through just such trusts. Unlike others that I have talked to, they allow you to invest the entire account. No 3 day wait to trade again either. I will want mad success before I do this, but it might be in my future. It takes a couple months to set up so get started early.

July was mixed but essentially even. I have not done the math. I made few trades, got chased out of VMW, now regretting it. I covered my VMW call and sold a September 80 call, looks like stock will be called away. I will consider adding options writing on other accounts in light of the nice short term returns I am seeing.

I had company here and was not trading for a week. But I sat down at the computer and had a horrible day trying to take some fast profits. My nice and respectable gains went out so fast and then some. But with better discipline I have recovered and am now up 5% again after my best day ever. Things I have noticed with futures and myself: I do well in the am and give back gains as day goes on causing frustration and larger mistakes, I need to better understand intraday risk levels and position sizing, I do well trading my own premises ignoring others, it feels so much better going into a weekend with gains.

There is a lot more work to do in many areas before doing this full time.

Thursday, July 29, 2010

Futures update

MBT has some issues I do not like. 1) The order entry portion of things defaults to limit orders, easy to switch to market, but sometimes it seems to switch back without my doing anything. 2) I have twice placed orders to do things in the future and the orders were canceled in some manner. The first was a few days ago, I was playing around with advanced order types, put in a loss stopping order along the lines of if price reaches point x sell the position at the market. The other was just over night now with an open limit order to sell at price x (in this case to take a profit). Some how neither order executed when I thought it should have. Perhaps shutting the platform down does this, if so it can be an expensive lesson to learn. 3) They had a working tick chart in all time frames when I signed up, it does not work on shorter time frame charts, no fix apparent for quite a while. 4) Sometimes it is requiring more than one click to buy/sell/cover an issue, even when I am clicking the right button. It is as if moving off the area of the workspace requires one to click on the workspace first to make one click orders go thru. 5) I am wishing I had what I see as a DOM type ordering interface. This does not appear to be easily available.

Because of these things, and perhaps some overall clunkiness I am experiencing with MBT I am now also opening an account with Tradestation, the funding wire should go thru any day now.

Tuesday, July 20, 2010

Speakeasy speed test

Trying something new


First off on the ISP speed stuff, I got greedy. The brochure from the company never promised me super high speeds, I just did some net research and that is what other folks were getting. For a measly 10 more a month I have doubled my speed here.

I am trying something new for me. See the chart.

Sunday, July 11, 2010

Book review and ISP speeds

ISBN 978-190-6659-71-4
The Guts and Glory of Day traders, true stories of day traders who made or lost a million. I ordered this book before it was published, looked like it was going to be good. IT actually is a reprint circa 2001 that talks to folks that made and lost a bunch from the net boom of that time. I've been doing this for a bit so it offered little for me. An okay read for a weekend, not for anyone that is seasoned. Save the money.

ISP now offering me service that should increase speed from 750K down to 10,000 download speed. A net search suggests it might really be 5 MB, but it is still 6x faster or better. I am going to check into this later this week. Turns out that cable out front was fiber optic.

Friday, July 9, 2010

Internet service


I think my trading got started using dial-up service. I was not active, thought more along the lines of buy and hold. But then I got more active and an open pipe became more important. I only had satellite available, got it and loved the speed. Satellite has some issues with signal delay, bad weather, maximum data daily so when the phone company offered DSL it was used. DSL has been similar speed, half the cost, and very enjoyable up until a couple days ago. The picture shows how a crew is burying new cable with "fiber optic" warnings. I suspect it is for telephone company but do not care as long as I can get faster service. I suspect they cut my phone line and went without service for a couple of days, back online now.

I am no longer an aggressive day trader but will look into backup net service, perhaps on a laptop cell phone card IF service is available here.

Tuesday, July 6, 2010

Pigs at the trough


I could have eaten more myself but sleep and peace were calling.

Duck duck goose


Last night I went through a lot of stuff at my desk, threw away several old sheets of data and notes. It was interesting to compare my notes from 2008 with the current market climate. I had a lot of good trading days but the recurrent theme was playing a bounce to the upside from oversold conditions, or this can't get any worse. Of course the market plunged a dull knife into those plans too many times to count.

Things are a little different now, very little interest in really playing bounces and I have no overnight exposure.

But, the Es future contract offers interesting chances. I took such chances "overnight" and had to duck a few times before my thesis proved right. So again I was too early and either had to sit through some pain or change my mind along the way.

DUCK- The E mini future contract traded July 5th when the rest of the market was closed. It closed on the low near 1011 and opened at 1800 hours last night around that point. I bought in around 1012 on the thesis that it would have been a bit oversold due for a bounce, that too many people were just scared on the 5th. This single contract trade worked fast for about 100 but I was WANTING it to be a $500 trade,and I felt safe that the 1011 lows would hold as a good stop. It turned on me and I had to take a painful large stop, $200. Meanwhile, a couple rules of trading were broken as I enjoyed nighttime beverages on a lovely night.

DUCK- I still believed in my thesis and bought again. Then Asia opened down fairly big, like around >1% and I got arse kicked again for about another $200.

GOOSE- I still believed we would bounce, bought again 1005.25, spent too much time watching the screen instead of relaxing, and have been restless overnight. I saw it once overnight around 2400 hours near a breakeven point of 1012. Woke again to see it with about an $800 profit, took it to the bank.

Fairy tell lesson: volatile overnight trades best left until Asia opens. I'd be roughly at the same profit if I'd held my original trade but it just hurts the account too much. I'f I'd been better disciplined to have only taken the last entry (ie wait for Asia to open to get a final over reaction) I'd have double the profit. Also noted was that as of 0411 only 230K contracts traded so tough to do this with a lot of size. I'm up 25% in this account since it opened early June.

Thursday, July 1, 2010

Observations of the future

Things I have noticed with futures:
1. Read the disclosures, there is large risk.
2. No pattern day trade rule. This means a smaller account (2k-5K for whom I talked to) can buy and sell all day long.
3. If you think you can read charts and markets, I think this is a great pure play way to prove it. When you are right, you are so very very right. When you are wrong, well...
4. I am enjoying the service and system with the futures broker I chose for now. Directly from the trading platform I can access a small chatroom where I can receive real time assistance. I think they are geared for larger players than myself, but they have been very helpful.
5. Ninja trader platform is nice, has some nice built in analytics, but for now I am choosing not to use it. It interfaces with some brokers but does so with a clunkier older version of my brokers trading platform.
6. The quirks of a new trading platform have me very grateful that I am only using a small account for now. Take some time to get comfortable before risking much.
7. Futures trade all night! Perfect for a junkie! But the real benefit is being able to fade or participate in extremes at 0400-0800 as the market whipsaws around.
8. I am still working on my dashboard of indicators. IT seems a few ancillary charts and quotes help to show the direction of things.

June 2010 review

I really did not trade this month. I did not look back at what I did as I recall holding onto positions in all accounts from last month. I'd owned VMW, sold out just above my buy price after having been up 7%. I also took money back from the options god on this, in excess of 100% return, a 1R gain. I also was holding RJI, sold out in light of current market conditions and the fact that its chart shows the 50 day below the 200 day. RJI was about a 1.5 R gain, had been closer to 3R, in three accounts! The reason the bottom line is not better is that these were all profitable positions held over from May, the profit did not grow much from then.

Discussion: it was a wonderful month of peace. I am going to reconsider how I invest in light of this. I am considering a much slower paced style with most of my accounts. I've opened a futures account with the idea of following commodities in turtle fashion. It might just be a lot of data to keep track of. I am enjoying the short term e mini trades right now. I know some of the single contract trading I've been doing in that account is mainly educational in how the new trading platform works, but it is amazing to see what can be done with a single instrument. I've tended to enter trades a little early but frequently I've been correct if I hold through some pain. I've also then been so relieved to come back to profit that I take small profits (50-100) rather than the larger ones (300+) that I'd envisioned with my original trade premise. This needs to change for me to scale this account up.

If I can do this I can foresee the day I can quit my day job is closer than first thought.

Saturday, June 26, 2010

401K review

Anything that has European issues in it is no good right now as evidenced by 50 day average being below the 200 day average. If I was a great technician I would have followed them closer and sold sooner. But for now they have come up a bit off their lows. Long term still a sell. I will be watching these closely to see about selling. AEPGX and RERFX. Everything else owned in 401K has the 50 day average moving down, not a good thing. But these are long term accounts, I hope to be rewarded for my patience.

Monday, June 21, 2010

Futures


Futures have been up nice all night. I've been dreaming about them all night, thinking that they have retraced. But each time I wake up they have made a higher high. Technicians are expecting head and shoulders TOP to be put in, many are fearful. As and if the market motors higher yet, they will push it more as they jump late on the bandwagon. As for me, I never jumped ship.

Thursday, June 17, 2010

Biding time

I am mostly just reading these days with glimpses at the market. I've opened a futures account but have little funds to trade with yet. Mainly I want to learn some of the fundamentals of the products and follow along to see if I can trade them without getting too wrapped up in gyrations.

I've been doing that with my trading accounts this month and doing well.

I've been reading commodity futures books from the Commodity Research Bureau and from I think CBOE. Great stuff. As Jim Rogers said, breakfast will never be the same again. In my opinion, these are must reads for market participants, even if you do not follow futures markets. I'd rather have a palladium coin than a gold one.

Friday, June 11, 2010

Brief scan

Looking at ETFs I follow not much is worth going long. Gaz decent b/o, UUP up, TLT also. QID and many things look to be in a giant wedge with difficulty determining the direction of breakout pending. I am not liking that RJI looks closer to a sell than a buy based upon turtle trend trading rules. I am liking the peace that has come by making only one trade this month.

I am surprised that my brokers internet forum has not had any responses to a question I posted with regards to trading just based upon end of day data.

I like the big cajones this guy exhibited shorting the market intraday up.

Thursday, June 3, 2010

With apologies to Don Miller

Emotions

I absolutely hate some of the emotions that go along with investing. Trading can be so much like chasing a high, sex, or other addictions. The all consuming thrill of planning, pursuit, stalking, and pouncing. And the emotional let down. I imagine that there is a whole biochemical thing going on in the brain and body also. I hate the days where I am wrapped up in that cycle when sitting in front of the computer.

Everybody gets what they want out of the market.

The LORD bless you and keep you;
The LORD make His face shine upon you,
And be gracious to you;
The LORD lift up His countenance upon you,
And give you peace.

Wednesday, June 2, 2010

A Letter to Our Leaders

President Obama and others in Political Power,

I am unaware of the back room discussions that have taken place in regards to the BP oil now contaminating our planet so forgive me for not fully recognizing your wonderful leadership. Forgive me also for not being a man of letters.

A true leader is proactive, not reactive. It is far past time for greater action on your parts to stop the oil now poisoning the lives of many. This is not a BP problem, it is a world environmental health problem. Allow me to armchair quarterback from my vantage point.

It is time to draw together the world oil leaders in one room and shut them in together. Attendance is not optional. Halt all work that is ongoing on other jobs, bring the big brain engineers together, the university scientists, the Army Corp of Engineers, the Coast Guard, the environmentalists, and any young up and coming Doogie Howsers. I also want large conglomerate manufacturers along with smaller specialty shops to be present. Once in the room, tell the facts as they are. Explain the construction of this oil well along with the known problems down deep. Have BP explain their efforts and what the data shows. Then get out some giant chalkboard and brainstorm. No idea too small or big, no expense too much, no effort too small or large. Write it all down. By the way, I suggest you give immunity to BP for any evidence they provide, as the data they have is crucial for an understanding of the problems.

Next, command, nationalize, or socialize all manufacturing efforts needed to provide support for all the ideas that could work to fix this problem. There is not a red blooded American that would not serve with honor to help fix this. Delay is not acceptable. This is an international emergency.

Then throw the full support of the US into the financial backing of this effort, with the forward announced plan to raise US fuel taxes to whatever level is needed. Combine this with whatever desired ideas you or others might have cooking with regards to US energy policy. Think big, this can be your legacy.

Then implement all the solutions at once. Be working on all solutions at the same time, not one and then another.

I'd suggest getting some Kennedy guys on board for whatever oversight panel you are working on. I forget where the two you named came from, but their pedigrees read like they are from the same cloth of many before them.

If I were a leader of this nation, I would have done this a while ago.

Respectfully,
A US Citizen.

FTD

Book Review

I've recently finished Jim Rogers Hot Commodities. A good read, perhaps helpful to balance a portfolio for those that have not thought of various vehicles to invest in. He talks about the following paper, follow the link to download it.

Facts and Fantasies about Commodities Futures
Gary Gorton and K. Geert Rouwenhorst, February 2005

Saturday, May 29, 2010

May Trading

I have a bad taste in my mouth this month, fairly disgusted. Few gains were had, only one closed trade had a profit higher than the amount I was risking. The details are tough to write about.

The big gain was a daytrade in SDS. The big losses were in what turned out to be short term trades in XLF, VMW, and BIDU puts. I was correct but early on the puts, bought them near the top, maybe two days early. Well that two days early stuff handed me near total loss of position and I ended up selling them as they came back a few days before expiry for a 3R loss in 2 accts, so this was a 6R loss! In a cruel kick to the nads, they closed in the money for what would have been a similar gain. I got more nad kicking with the VMW and XLF spots. They closed one day just shy of an R loss each, then went pretty fast to 3R loss the next day. Based upon my rules, I took the loss, they did go lower. Again VMW was 6R due to holding in 2 accts. When I'd bought the VMW, I saw it as a leader that I was really willing to give 2% loss to, not .5%.

I am going to chew on this for a while b4 commenting further.

Tuesday, May 25, 2010

$SPX.C

Digging for Gold?


Actually just trying to get room for a berry patch.

RJI

Pain!

It has been a while since I did many scans, went through some charts this am and things really look crappy. The only things close to bullish are the yen and dollar (FXE UUP). PTM and VXX might be okay also. Gold is debateable here, but I've been influenced on that one by an email I got. Retirement accounts continue to suffer as does my position I got into yesterday in XLF.

I am reading Jim Rogers book Hot Commodities, they are suffering also, seemingly contrary to what he is saying. There are some ETNs that track his index, I am going to start watching them more.

I should follow my own advice more.

Monday, May 24, 2010

Plan

I expect that volatility will calm down. If there is an easy way to trade VIX on the short side without being short I will look into it. Otherwise this remains a market I am not interested in being involved in. Research time will be devoted to evaluating possible long stocks in the event we get back into an upswing. I will also continue reading about futures, set up what I think is ACAT or ACH funding of futures account.

I reviewed 401k and annuity data last night. It pains me to look at the money that evaporated away, yet it only takes us down to par for the year. 50 day still > 200 day so I remain all in. Trading acct is similar story.

I want to be pickier with what I buy if market gets healthy.

Thursday, May 20, 2010

Clawing as best I can



Average price was <2.95

Nerve wracking


It got to feel a lot more like luck. I expected this to happen sooner, when it did not I should have gotten out. Time to go swing a hammer!

Wednesday, May 19, 2010

Futures decisions


Well I went ahead and made some decisions. I remember when I started with my current broker that there was a steep learning curve for the various platforms. Different features, bells, and whistles. Setting up quote lists, parameters, charts, alerts, all of it. It occurred to me that maybe I would enjoy having a backup broker to turn to, or that I might like the futures so much that I would only want to trade them. So if the learning curve is steep, and some brokers might only do futures, some might only do equities, having another broker that could do all from one platform/account might make things easier. I've heard that IB does this, but I find them a mess to navigate, have picked up that customer service is not that great-it is designed for folks that know what they are doing and I clearly do not at this point. So this left me with Tradestation and MBT. I'd looked at TS a while back, generally have heard some bad things and I did not like something with a Beta chart package they were putting out. So late yesterday I started opening a MBT account, VERY FRUSTRATING. Good thing I am starting this way earlier than I need to.

I need to be careful of greed. I've followed some futures prices this week, made some analysis of what the market could give one if it had been traded, and the chances are there to exponentially grow ones account. This am I look at the emini and see it has traded in a range of 1104-1118 overnight. I've followed this kind of thing for about a year now and it is amazing the moves this thing makes overnight and premarket. If anyone actually reads this, perhaps you have seen how the market opens one direction when the latest Yahoo finance front page says futures are down. Take a look at the picture, as I snipped it futures were really only down 3.5. I'd seen this market at 1106 early this am, don't know if I'd have traded it, but it is now at 1115! Maybe my math is wrong, but that is $450 move for each contract emini.

Maybe some daytrades would be okay, just would need to make sure I do not fall down an emotional slippery slope.

Monday, May 17, 2010

Futures vs market activity


So overnight the spy/eminis traded in a 1120-1140 range. I figured that trading off either of those extremes would be good for a daytrade-fading whatever extreme was approached. I did this with very little pain this am. I took a look at what I think the math could be for this one trade if it was eminis. For one contract I could have pulled in $300, for my goal of 10 contracts it could have been 3K in gain in less than 30 minutes. Intraday margin requirement, if I am correct, would have been just over 14K to make that trade. In my opinion, it was low risk, decent reward scenario. I got a 1R gain out of this.

Sunday, May 16, 2010

Futures Plan

This is a long term plan with live implementation being considered for 2012.

1. Learn the brokers. Currently just a few being considered due to cost and service levels. Infinity AT looks ok, very responsive, likely no fees once account opened just to follow and learn the markets. MBTrading and Tradestation slower to respond but likely in line price wise. Those I respect use MBT. I am looking at the demo of Infinity and will demo the others. Next I will open a real funded account with the better of these and do some simulated trading as I follow the markets.

2. I will learn the markets. I will remain open to a fundamental news source so that I can better understand the factors that influence the price action. Hopefully this is the kind of thing that will not permeate too many trading ideas but educate so I can make the decisions. I also will learn the basics of the various contracts through sim trading and reading books such as the new one I got yesterday from the CBOT-Handbook of Futures and Options. There appear to be some okay online resources to learn also.

3. I will develop a trading plan with defined rules for application that incorporates risk management and position sizing, when and what to trade. Currently I am thinking to NOT be a daytrading monkey but to try and catch longer term trends similar to what I have read in trend following books. Then through paper trading with sim account or on paper, track the signals and learn how the pain vs gain stuff works out.

4. Build funds with money that will not change my lifestyle.

5. Decide viability through post trade analysis. Decide funding level desired.

Tuesday, May 11, 2010

Futures

I spent a good part of the day yesterday reviewing different futures brokers websites and sending them email questions. I am disappointed in no responses from Tradestation and MBTrading so far but they did clearly have phone numbers if I needed a real person. I had a tough time signing in to my demo Infinity AT platform, they emailed and called me back the next am. I was using the wrong password as I could not read my own handwriting. The broker/sales guy called me in the am also, talked me thru what I was doing. That is a big plus.

Here is what I found out. Tradestation not as well rated at elite trader forums, seems to offer a lot, including charts. Might be $100 a month without and trading, I am willing to pay in order to learn. MBT might have some data fees. It is not clear if they have a demo mode in either of these. Infinity has live simulated mode, does not include charts but they are available for $30 a month thru another provider. I am not sure of the data included with them. Infinity does not seem to want to give access to all data, they would want to add different contracts piecemeal due to the cost.

It is interesting to look at all the flashing lights and be able to put on large contracts. But this is not what I want to do. While I will pay attention and have a single screen set up for intraday moves in something like the SP 500, I really want to trend trade moves in the futures and commodities. In order to best follow and understand these, I want to watch and keep records of paper trades. I am able to look at charts on Finviz, these seem kind of basic without ATR indicators that could help me determine position sizing. But I can identify potential trades setting up and see how trading some breakouts month ago could potentially lead to profits. Here is what I saw last night to follow:
Feeder cattle a buy at NH 115
lean hogs near NH
nat gas in range, can trade the b/o either way
pork bellies a buy, rice a ss, oats a ss, soy oil a ss,
OJ long or ss b/o, same for cotton.

But the tough part without a broker or better data is determining ideal position sizes, stop losses, seeing how the potential trades shape up, and what the pain and gain ends up being. Looking at all the flashing lights for eminis is fine, I want the big gains with holding in trends.

Monday, May 10, 2010

PREDICTION

The end of the world is not upon us. I suspect that questions remain in native lands as to the viability of proposals. I also think that our markets have likely seen the worst of the selling action but that we have a ways to go for new minibull to rise. We are digesting and chewing on our cud in the second stomach and have created a lot of gas. Teachers I have listened to seemed to know very well to step aside and allow the market to do its thing, avoiding the intraday noise and playing hot and heavy in big demand leading stocks when the time is right. I do not think that time is now. I have lost a lot of money playing stocks in times like now and expect I will be very uninvolved in trading until proven different. Volume seems low for this huge move up today, might yet be a dead cat bounce.

I need to be aware of my surroundings and be ready to pounce. In the interim I am looking more seriously at futures trading.

Theme Song interview

Q: I notice there is no quote machine on your desk.

A: Having a quote machine is like having a slot machine on your desk- you end up feeding it all day long. I get my price data after the close each day.

Sunday, May 9, 2010

Market madness

There is plenty of emotion in the market, I myself am fearful of losing a lot of my retirement funds. But I have a stable job and will just continue to work, saving as much as I can. If my trading were better I would argue that 401K owners need more control over their funds. The market was looking healthy as it advanced, the simple things I currently look at for market breadth suggested that this was a strong bull market we were in, warning signs were not flashing that big bull was over. The way I see things, if I was not smart enough to pull money out of the market as things went up, I need to sit through this time now. Of course, if the 50 day moving average moves below the 200 day average, all bets are off. At present it looks like that could be coming. If the market behaves poorly on Monday, I will consider a 1/3 move to cash in 401k, pulling out of the Europac fund.

Some interesting black monday 1987 links: What Caused the Stock Market Crash of 1987? and Black Monday (1987)

I want to get in touch with my inner voice more, learn to listen to it. As I was noting the danger signs of crumbling leaders I was thinking it was time to get out of the market and bury my head for a while. If I'd done that I'd have a few more percent of my equity still listed in my account. This market is too volatile for the average participant. I will wait for more reasonable times but continue my processes for monitoring potential leaders. I know of nothing else to do.

Wednesday, May 5, 2010

Danger will Robinson


So yesterday SIRO makes the IBD list of good movers up on volume. How did it do today? It is tough to trust the market and stocks. It is even tougher to trade individual issues instead of broad indices due to such action. Buyer beware!

Saturday, May 1, 2010

Work chart review


This is the one that is closest exposure to Greece. It is the worst performer of what I have. The simple system of following long term moving averages is still bullish.

Month and trading in review

It is getting hot around here. While I appreciate getting inside to cool off, it is a bit stressful to review my trades, rethink the moves, wish I could grasp for those that got away, and kick myself in the pants. But it also creates an attitude of gratitude as I think of how the exact opposite of the above could have happened. I know lots of people lost their arses this month.

Overall I am very happy with my trading. I feel like I have got initial position sizing and risk management via predetermined prices at which to take losses. I'd like to determine better if my points of taking losses are correct. When price is trending down, there is no way of knowing when it will stop doing so, making it difficult to hold onto losers. But just taking a look back at this post tells me there could be some work to do. If I'd stayed in each of those 4 stocks I'd have a lot more money right now!

I traded a lot, 33 trades give or take. For me a trade is a buy and hold or a buy and sell, so number is more likely double. For ease of detailing it, I am calling R as 0.5% of my trading capital as the amount I would risk on a trade. This month gains in excess of R were: 1.4R, 1.46R, 2R, 4.8R, 5.1R. Losses in excess were 1.39R and 1.85 R. I do not feel real bad about the 2 big losses. One was a gap down after earnings (maybe should of been out of it) and the other I did not have good alerts programmed into my platform. I hated not having a good alert in as it got near my loss point, but the difference in time was minutes...it just crapped and got flushed that fast! My two biggest gains were a big trade in C on the first day of Greek fears (held 4/16 4.56 until 4/21 4.97) and on PWER bought in two installments (5.4 on 4/22 and 5.57 on 4/26 and sold premarket gap 4/30 at 6.9). PWER could have been held longer but I doubt I would have kept it into the weekend. It was a marvelous gift!

Overall I was up 1.45% for the month and now 4.5% YTD. That is 3 months positive in a row! For the time involved, I could have just worked OT at day job and beat this with the money at risk.

Emotionally it was a roller coaster. My protection from losses during the ride was predetermined loss points based upon an issues volatility. I did not screw up taking losses. I sold some things prematurely not wanting to sit through whatever was happening but once I recognized my WEAKNESS in doing so, I capitalized on others doing the same and had my 2nd best gain of the month.

I want to do better with a daily trade log. It is tough to look back to fully know the reasons for trade entry and exit. I want to be a better predator on entries.

Some of the action of "market leaders" concerns me. I remember such concern when I took a small profit in APPL years ago. I'd bought it at 98, sold at 113 after it came in from 120, it got near 200 by the end of the year.

The option god demon still willing to take my money. One small gain, two small losses, two open positions.

Friday, April 30, 2010

Tuesday, April 27, 2010

I like this video

The Trading Doctor, Dr. Janice Dorn talks Psychology and Markets with Matt Davio @misstrade from miss trade on Vimeo.



The start strikes me as too much hocus pocus. It gets into some great stuff as it goes on. He deflects the therapist in her a lot, I doubt he will take her up on her services.

Monday, April 26, 2010

Invisible chart


With thanks to Andrew Lais. I am not sure how I will use this but I like the looks of it. It might help me to identify better entry points when the averages get tighter and it might help with accepting certain stop losses. For example, if I buy VMW now but my stop loss gets defined at 56, I can see where this is in relation to the average and decide if that is a risk I can accept or if it is a loss I do not expect to happen.

Maybe today?

Thursday, April 22, 2010

Top Pick

Okay, maybe top hope and guess



Wednesday, April 21, 2010

Restraint equals indulgence

I don't "feel" like I have my finger on the pulse of things, been busy with work and life. So I choose to not trade much, have a very light footprint in the market right now. I'll do some better research in the am, want to have some candidates and conditions lined up.

The blog title comes from a book I have been reading on a family that tried to eat local food for a year. The author talked about how we eat everything we want when we want it, not being willing to wait for seasonal foods out of the garden. And yet we expect kids to wait for intimate relations after living lives absent of restraint. The author suggests that waiting for the suggested aphrodisiac of fresh spring asparagus is the restraint that equals indulgence. Perhaps waiting for my trade that I feel good about is the same.

I suspect I have read enough market books to be successful and just need to continue on the path I am on.

Sunday, April 18, 2010

thoughts

Well Friday action was really not expected. Many of my positions got stopped out. Those that did not were also down large, I went ahead and just stood to the side on most of them, let the market calm down and say what it is going to do. My account balances took a hit but I am going to say this has been a good month of trading with disciplined small losses. Prior to Friday, I'd had several positions up at least the amount I was risking on them. So for now I will survive, trade smaller, keep a watch out.

What most ticks me off was the scenarios I had not accounted for. One of my positions went further against me then I'd wanted as I do not like to use hard stops (I do not place orders until after the action happens) and the alert I had placed was at the wrong price. I was poorly prepared. I need to work on my planning and implementation better. It then was compounded by the cleaning lady vacuuming near my computer and sending things haywire.

Having some form of risk management in place keeps me from getting butchered.

Friday, April 16, 2010

How I take a loss


My record keeping is on a notepad at my trading computer. I like the idea of follwoign new product companies with good sales and earnings.Looking back at records and trade records on 4/7 I purchased 300 Shares of XRTX. 2*ATR was 1.71, the amount of money I was willing to risk was about $500. I recorded a stop loss of 17.27 based upon this, along with a note to add if the stock took out 19.25 highs. I felt real smart buying that day as it made the top five list for stocks moving up on volume that day. Yesterday the stock moved a lot with some news, I think someone started following the stock. It fell hard on 5x volume. I saw some of this from work, action did not look good and rather than waiting for my stop loss to hit I sold at 17.76 for a loss of $369. It did take out my stop loss, but did close above it.

Discussion: if you click on the chart and open it, the stock has had 2 big gaps up. Perhaps this uneven trading, ie emotional, was not the best pattern to get involved in. I thought about this a few days ago but stuck with the trade. I will also consider wild patterns as difficult to enter. I'd rather see more regular movement in a stock. I'll keep this one on my watch list as it might set up again.

Sunday, April 4, 2010

Update on March 2010

20 trades were made with controlled losses, some profits, mostly in a 2% QQQQ trade at start of vacation. Of the 20 trades I am still holding 7 of them. Some of the 20 are really one trade but spread over several accounts so do not be fooled thinking I was doing a lot.

Discussion: Two trades were very disappointing to me, I made bad entry on stocks at spur of moment. I got out of both of these earlier than my predetermined loss points prior to them getting there. Another trade I do not recall my reason so I'll say a third was bad. The rest were researched disciplined entries. In retrospect I think two of these were where the 50 day average was below the 200, dangerous longs but one is working out for now. PCLN was another tough one, it was on my watch list with directions to buy a starter position and then add when it broke new highs. I never got the chance and bought in for double position right away and it has held that new high plus a bit. I am telling myself that I will risk 2%, not my normal .5%.

I really want to get this all on a spreadsheet but have limited time with holiday plans and yardwork. I will instead just review charts and market health.

Thursday, April 1, 2010

Performance review- too be updated

March was not so good. Accounts are up a grand total of $52. But I took a lot of quality time away, had no big drawdowns, was disciplined in taking small losses, had some nice gains in some issues. I will review more in depth later. I added to a Roth, this makes the accounting a little messier.
Jan -1.7%
Feb 4.37%
Mar .0005%
Ytd about 2.6%

Tuesday, March 30, 2010

Wednesday, March 24, 2010

post edited, long LOCM with good risk control

Tuesday, March 23, 2010

Pondering, thoughts

I have kind of taken the month off. I had visitors in from out of town, my own stretch of time off from work in which I was traveling, and times with my spouse in which I had best not been an ahole! I kept up with the market some, but not been in front of a screen at all times. I am happy to see that market prices have been rising, helps to confirm holding 401k/annuity accounts during trying times when we made lower highs. In trading accounts I've held onto one position, held QQQQ for 2% in several accounts. As things stand now the account is up 2.48% this month, 5.1% YTD.

I was planning on doing a few things this month that I have not yet: experimenting with 30 day free futures platforms, learning Excel spreadsheets, and coming up with better defined beliefs about the market along with well defined methods to trade as vanTharp teaches.

I will not get to those things yet as there are stocks to review, I need to follow up on some tractor repairs underway as I consider a new tractor with a front end loader, and I might try and buy some more pigeons.

If you are ever near Philadelphia, one must experience both the Reading Terminal Market and the Italian Market.

Monday, March 15, 2010

Interesting to learn

Years ago I heard there was some kind of way to set up a retirement account to have investments other than stocks and mutual funds, at the time I was thinking of some land and raising wood. I finally got some basic information on this from a futures broker. So far I have only checked out one of the following.
http://www.mtrustcompany.com/
http://www.theentrustgroup.com/

Tuesday, March 2, 2010

CNO sold

I sold that CNO, not a good or disciplined entry, really just a dog refeeding on what was good once before. 4.96 lowest exit. It was less than .5% equity loss. CPTS doing better.

Monday, March 1, 2010

CPTS long

CNO

February simple review

I've just worked a long weekend and have not had my mind wrapped around the market much. I think I will go back later today and review all February trades. It appears that the addition of some simple risk management skills have helped. For the month I was up $3777, or 4.37%. YTD I am up 2292 or 2.6%. I'll take month or two month performance like that for the rest of my life no problem!

I've placed an ebay bid on the Van Tharp home study course for about 1/10th the original cost. If the bid falls through, I might just buy the thing new and concentrate on it for the next several months.

Thursday, February 25, 2010

XLF

I sold XLF without a good discretionary or systematic reason. It just was not going anywhere, I'd rather have settled money to enter a trade that could work in a few days.

Wednesday, February 24, 2010

AVAV

NFLX


I sold out of NFLX, it was only a small position, I took a small loss. It was a discretionary sell.

Friday, February 19, 2010

Too good to not post

Thoughts


Insurers sure seem hot. Lots are popping up on volume.

There seem to be some good trades that could have been made off of support and resistance zones for nice money.

I can't trade the unknown. I do not think many foresaw rate change last night, have to just stick to a plan, ignore news and fear. Raising rates is healthy and normal at this level.

Risk management: I've many thoughts on this this morning. Risk of ruin is something I was either unaware of or ignored when I started trading. I am proud that I am decreasing my risk of ruin by using some simple position sizing methods when I enter trades. I am also proud that I am no longer entering trades with unsettled funds, an absolutely horrible habit to have been practicing. It caused me much grief. I am also doing better having predetermined exits when I enter trades.

I am pretty sure that I have read of some folks saying not to worry about entry points for stocks, one needs to worry about the exits. As I think about this stuff, I see it as true. I entered four different issues, without them clearly having systematic entry points, all were profitable as of the close last night.

I am reading Super Trader by Tharp, good stuff.

Tuesday, February 16, 2010

Monday, February 15, 2010

I am a detailed trader

http://www.tharptradertest.com/default.aspx?question=1

Status report

I ended up buying more of that stock so that I was all in. I lost a percent on the new entry. I really did not have an answer as to what my best sizing was, had many more unanswered questions, felt safest to just sell everything. This selling might again prove to be the wrong thing to do.

I've not received many answer to questions I've asked regarding position sizing and risk management so am striking out more on my own. Van Tharp book Super Trader covers some of this, reading it now and will use this as a springboard for other reading and development. He offers a lot of training, seems to be a big neurolinguistics programmer kind of guy, success with which I remember as a high school ball player. He offers an $800 self study guide I am considering, will wait for now.

Elite trader forums also mentions several books on risk management and position sizing I will look to purchase used.

The more I learn, the more there is to learn.

Wednesday, February 10, 2010

Adding to positions


It is tough for me to figure out how much to add to a winning stock position. I've tried to be more methodical in selection of what to trade, some things have not panned out with small losses the past few months. I've had some small winners also but have not had much in the way of double digit gains in the past few months. I am now sitting on a winning pick with >5% gains. I have about 66% of available capital in this stock but only 2% of my starting capital at risk due to built in mental stop. I bought this stock on range breakout (rule), added after a pullback(discretionary), added as it went back through original buypoint (discretion) just prior to what would have been a rules based adding point. The stock has continued higher from there.

I am not sure how to handle this one now. In no ways am I considering selling this. Fundamental story is good, as are growth expectations. But I fear putting too much at risk in a single issue.

IBD canslim stuff would suggest concentrating on few issues without many positions, pyramiding in as stock moves up, with a maximum buypoint of old high times 1.05. My stock is just beyond that point now. In my view the chart has just completed a cup with handle breakout, with a subsequent pull back below the buy/pivot point. Some would call this a shakeout, I think some would suggest it adds to the spring or coiling move to rocket the stock higher. http://www.hankpruden.com/MTWyckoffSchematics.pdf I've gone all in on stocks and lost before, have rarely done well. This one is acting right. And I have heard that cup with handle breakout is one of the better patterns.

My trend trading interests of late would have me not get overly into highly correlated issues, certainly being all in a single stock is such. But I can also take entries based on planned 2% maximum loss. I've not set up my "maximum contract size" that the turtles had.

If you have any thoughts that you are willing to share, please do comment or email me. Thanks. Click pic for better image

Scans

One of the things I want to do is to set up a quote screen that has sector based ETFs or indices that will allow me to see on my own how various parts or segments of the market have moved and then develop screens or printouts of the companies that compose each segment to look for good trades. This am I am just scanning big movers and see that solar and clean energy ETF have tanked of late. They seem to be an avoid for now, ALTHOUGH, looking at the charts they have reached areas where the previously bottomed. See charts for PBW and/or TAN.

Sunday, February 7, 2010

Trading failure

I've seen it time and time again regarding failure of traders but little discussion from the inside. The following is an interesting read into this subject along with a good teaser for a future book.

http://www.smbtraining.com/blog/the-failure-rate-of-a-proprietary-trader

Current read

Video was mentioned in Think Twice by Mauboussin.

Friday, February 5, 2010

Good week

I made a couple of daytrades this past week or two. The first entry was correct, went to my goal, I held longer than I should have but still ended up with a profit. Another today I played an initial bounce off the bottom for .5% move. I closed out a trade prior it reaching my predetermined stop loss as I viewed it as high probability of reaching that loss point and it did. I justify this as saying it was a higher risk entry and went down through a key price point. I have one stock right now that looks good, added to it and will add more if and when price goes up.

Blood in the streets


In a way what I think of things does not matter. My thoughts have had me overreact in the markets and have had me whipsawed around a lot.

I have money invested in many types of accounts, the least flexible of these due to rules is the work retirement accounts. For these I have tried to trade following a few simple rules. I like to hold these when the short term moving averages (50day) are higher than the long term averages (200day) and be out of them when the 50 is lower than the 200. I also like to look at charts to see if we are in a pattern of higher highs and higher lows (bull mkt) or lower highs and lower lows (bear).

The current market is scary to participate in. We are making a lower low but the averages still line up nice for an investor.