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.

AVAV

NFLX

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

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.

Olympic music

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.

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.

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.

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.

stock analysis

I had a 30K day!

If you do not get this at first, see my other blog! Click image for larger view.