Trade - 12/22/08

Didn't think I would (or want to) trade today but I had some time in the morning so I thought I'd fire up my scans and see what develops. PRU set up nice off the 5-min chart and I went short off a break of the 10:45 bar low after price kept finding the PDL as strong resistance. I didn't have the whole day to trade and actually needed to leave at 12:10 or so and that's when I dumped all my shares. Wish I knew how to place IB orders to sell 15 minutes or so before the end of the day. Got to read up on that.

A decent day with a nice entry and a good run. While I hate missing the runs... I do like seeing the stocks I enter do well.

Chop, chop

Got chopped to bits trading off the 5-min charts all day. Finally took a breather at 1pm and decided to wait for the FED decision. Glad I did. Entered NQ e-mini at around 2:17 and within 5 minutes made everything back and then some. Then, did a kinda bonehead move and went long GG without any kind of entry point... it crossed over $31 and I entered. Price bombed right after entry and I just stuck with it (yes, giving back everything I gained from NQ and putting me back in the whole again). I had faith that the rate cut would have folks investing in gold as the dollar's value is gonna get whacked. Price came all the way back up but I sold at $31.23 for a modest profit. Pulled another one out of my you-know-what but I had the right plan.

Sorry... no chart, no screenshots because I've got no time. Packing and heading off early in the morning. Take care and I hope to trade on Thursday in the morning. 

Jim Cramer speaks out

Stock review - CLF (12/15)

I mentioned missing CLF yesterday and I just wanted to post the chart to show what a nice setup it was. Shame I didn't have the time to catch it.

Price gaps up but then falls back down to find support at the PDH at around 10am. Stocks tumbles around in no man's land till about 12pm when it hit the PDH again. So, we look to see if it again finds support or breaks through. Price breaks through and under the PDH and consolidates. There's a nice little trendline from 12-12:30 from the higher lows. The 12:30 bar not only breaks the trendline but also closes very weak right at the PDH confirming what was support is now resistance. At the same time, the DOW seemed to be running down off an overbought situation. In hindsight, this was a good time to go short on stocks but I prefer to find a good setup that pretty confirms everything instead of solely relying on the DOW. 

A $1.5 gain could've easily been achieved as price fell down to the 38.2 retrace level (which was also the intraday pivot point).

Textbook setup. I will permanently etch this in my brain. Brrrrzzztt... done.

No trades

Very boring out there for me. Although there were a couple of good opportunities on the 5-min timeframe (AAPL, CLF)... I just couldn't sit in front of the computer the whole time today.

Kinda sucks because I'm leaving for the States on Wednesday for two weeks and was hoping to get in a couple good days before I left. While I'm hoping to trade Thursday and Friday - depending on conditions - that may be it for the rest of the year. I'll probably throw in a post here and there though.

Friday's trades - 12/12/08

Very quiet today and actually no equity trades at all. Just one futures trade that I wish had moved just another 1/2 point or so in my favor so I could've had a nice day. Instead, I decided to ride the pullback out and ended up giving back a lot of profit.

Entered on a break of the 12:30 bar high as price confirmed PDL as support. Target exit was the 38% retrace from yesterday's low but it just didn't make it there. Missed a later entry (red arrow) as my son wanted to play Pokemon cards. Thanks son.

Thursday's Trades - 12/11/08

I'm changing my name to The Magician Trader. Instead of pulling rabbits out of a hat I pull trades out of my ass. Today was a complete slaughterhouse for me in the morning. There were a couple of trades that, while they made sense, I shouldn't have taken. But even taking those trades out of the mix (SCHW, COST) it really didn't make a different to my bottomline.

What saved me again and brought me back into decent profits???? ES emini. I went all in again... twice as much as last Friday and ended up catching a nice 9-10 point swing. Of course, it kept dropping after my exit but I was happy to leave when I did. I make fun of pull this trade out of my butt... however, it was probably the best setup of the day - coinciding with the DOW drop. I got spooked out of ACI, JPM and CMI before the dropped big, which really sucks. Can't list all the trades but here are some of the better looking charts and entries. The second arrow shows where I either re-entered the stock or, in the case of ES... added more contracts.

Peace out.

Wednesday's trades

The day started out well but then turned nasty. I saw nice profit vanish and I ended up closing two positions at BE which was the right call. CAT was a nice winner today and it looked as though my exit was once again premature (probably still was) but the stock tanked later in the day so I don't feel too bad. At least I stuck it out till the original price target was hit (yesterday's high).

Entered MOS and BHP off the 5-min chart and was quickly stopped out of BHP (my only loser). I then added more shares to MOS off a break of the 11:30 bar high (:15). I felt shortly after my second entry that MOS wasn't gonna do anything and just decided to move my stop to BE. 

Shorted KGC off a break of the 10:30 bar low... then closed the position after the long tail on the next bar. Re-entered long off the 11:30 bar high but then closed it all for a minor gain.

Tuesday's trades

More of the same for me today. Start with some losers... end up with some nice entries then decide that - despite everything I know - I'll just take the money and run instead of waiting to see if my target exits will be touched.

It's tough for me right now to let good money slip away after being down early. I will get over it.

Good trades:
STI... break of 1:05 bar low (5-min chart). Liked how price broke through yesterday's low then retraced to form 2 inside bars. Since the spread was very small, I had a decent amount of shares. Scaled out here and there for a good profit. Original price target was around 29.85 which was hit later on.

GE... technically entered on a break of the 12:45 bar low after the 61.8% kept proving to be tough resistance. I was actually looking at this on the 5-min chart but decided to enter off the :15. Again, had a good amount of shares, scaled out a bit then sold all at 18. Not too disappointed as my price target was actually 17.75 which, say it with me, was hit later in the day.

Bad trades:
BNI... thought this trade would do better but it didn't and I was stopped out quickly.

NQ emini... eh, took a shot at a short - just one contract and my spread was small.

Monday's trades

Today offered a little bit of the same (not letting winners run) and something a little different (messed up an order in my favor). COP was a bust (get it... oh man) and got me started off grumpy. Then I entered POT off a break of the 10:30 bar high. I liked the narrow range bar that formed right at the ORH. Price then fell back to the ORH and printed another nice entry where I bought more shares (11:15). That was about the only good thing I did with this trade. With the up and down price action I got nervous and sold all my shares at just above $59.

I was okay with exiting POT because my next trade did well right off the bat. I entered HIG short off a break of the 12:45 bar low after price fell down and through the ORL and came back to print a weak candle just below the ORL. This is where I messed up. After price moved 1R I went to place another buy-stop order for 1/2 my shares... but I actually entered a sell-stop order and added more shares. I quickly exited and pocketed some change but I was a bit frazzeled so I exited earlier than what I wanted. Probably worked out best as price shot back up and I would have closed the position anyway.

Long story short... made money and did not manage my exits well again. It will happen one day.

What should've happened

These are the setups I should've been interested in and focused on. All the entries occurred after a fib. level (and some pivot levels) had proven to act as support. The entries were also supported by the action on the QQQQs (first chart) - which is what I use for market direction.

Patience is the name of the game which is what I lacked yesterday. I should've stuck to my plan.

Divine intervention

Don't know what else to call it. Started off the day as usual and with a good, healthy WL. However, a lot of the stocks on the list gapped down and continued moving way down during the second and third bars. I have been drawing my fib. lines from the PDH to the PDL and sometimes to the ORH/L depending on how much it gapped.

This has been working all week.

No need to change right?

Wrong.

I said... let me go ahead and draw the fib. lines from the intraday high to low. Then, once price retraced I could look for an entry. What a disaster. The first trade I entered turned against me immediately (BHP). I then shorted ADI on a break of the 11:30 bar low and that went nowhere. Then, I had an alert set for ES e-mini futures which triggered and I made a couple entries as price was breaking above yesterday's low (:05 chart). And just like that... I was in the hole big. I then said I was just going to trade my way out of it or dig a deeper hole but I wasn't just gonna stand by and be smacked like that.

I then entered AMZN and HES and, one by one, they all were stopped out. In the hole even bigger. So, I watched the ES e-mini on the 5-min chart... and noticed a cup and handle pattern forming right below yesterday's low. It was around 12:30 to 1pm and I actually thought a bear flag was forming till the very end. When I saw price take out yesterday's low on a strong bar, I crossed my fingers and loaded up on contracts. It was make or break.

I'll save you the suspense and let you know that I made just about 13 points off the ES e-mini (almost to the 38.2% level from yesterday's low)... put me back in the profit column and I have since renewed my faith in God. I also had to give up hookers and crack for life.

What's the moral here? Well, I changed what was doing well for me this week and was slapped for doing so. While I didn't change it drastically - just applied the fib. levels differently - at the end of the day I would've spotted at least two to three good trades from my list without the worries. I just feel thankful I was able to end the week on a positive note and keep the winning streak alive for another day. Another thing... it always seems like when my back is up against the wall is when I make really good trades. Joking aside, there's got to be something there I can extract and use on a daily basis. I think it's the lack of fear and being aggressive. Sometimes it's just an attitude change.

Issue of time

My trading schedule right now is not conducive to making money throughout the entire trading day. By around 1:30pm, it's pretty much hit or miss whether I monitor the markets for new opportunities. By that time I'm juggling more than a few tasks at once and can easily miss a few :15 trading sessions. I think we all know that the market can be a bit two-faced. What it does in the morning could be something different come the afternoon.
What I'm getting at is that I missed a few very good setups yesterday due to the fact that I was pre-occupied and had essentially lost interest. Here are a few charts of some afternoon entries that coincided with the market downturn. These are not random entry points... these are setups that I actively look for at key support and resistance areas. For golfers... hitting the perfect drive keeps them coming back for more - despite the number of slice shots. For me, my motivating factor involves not missing opportunities on an already reduced watchlist. This hindsight crap is costing me money!!!!

Tough day

I was profitable but the positions I entered just didn't stick. The market seemed to lack direction until late in the day and by that time I was out. Entered AMZN long and APH and CS short. AMZN was the only one that provided decent returns the rest were breakeven.

A few trades

So... I'm a bit under the weather right now. In fact, I'd rather be curled up in the fetal position than posting charts - but this... this is what I do for you.

Okay, so I tried some new things out today and ended up profitable, so that's a positive sign. Really just messing with the fibonacci levels. Oh, and I removed the 5ema from the charts along with the pivot areas (for now). I just found them so distracting and a bit of a hinderance. May end up haunting me. Anyway, got a date with a bottle of Nyquil.

Coulda done better with my GE exit the first time but I managed to get in later in the day and scalp some profit.

No trades

Not a lot that I liked. Pretty whipsaw day with the market up, down then back up again. Lost interest at around 1:30.

If I only...

Let them ride. A bit frustrated right now as I missed some nice moves by being a chicken shit. Slightly negative on the day... blow me. HAL, VNO, CHK, FCX, CAM

Enjoy your meat!

On behalf of the entire staff (me) I'd like wish the thousands upon thousands of loyal readers (10) a very Happy Thanksgiving. Of course, if you're not American... just enjoy your day.

No trades

And no regrets. Just couldn't find anything I was comfortable with. Hope you all did better.

Peter Schiff

This guy's good. I think I'm investing my entire 401K in gold.

A good start

There are three things I wanted to improve upon moving forward with my trading. My watchlist, my entries and my exits. Well, I think I did okay with 2 out of those 3. Of course, I mismanaged my exit - kinda. 

Alright, I went long GG off a break of the 11:15 bar high as price pulled back to the ORH and formed a strong candle. Maybe I should've been a little apprehensive considering that wide range up bar an hour earlier. Wasn't exactly an orderly pullback. Long story short, stock went my way at first, I put half my shares at breakeven which was hit and the other half at my normal stop (opposite side of entry candle) which was hit as well. I thought this stock would do well as the sector was very strong.

The next trade was AMZN. Again, I like the first bar closing strong and the subsequent bars staying in the upper half of the ORH. Entered long on a break of the 12:30 bar high and price took off. Well, didn't take off as much as it didn't make me sweat it out. So the plan was after a 1R gain I would move half my shares to breakeven and let the rest ride. Well... I decided to scale out after a $1 gain and, instead of letting the rest ride, I figured I would set a .30 trailing stop (thought that was very generous of me). Got burned and was stopped out on the rest as price proceeded to climb more than a $1. The exit strategy will come once my confidence comes back.

Watchlist changes

I have always said that compiling a good watchlist is just as important as having a good strategy to trade. Recently, I've loosened the criteria of what makes my list and what doesn't. In doing so, I somehow got it in my mind that any stock on my list was good to trade. I lost focus. The focus of checking the opening range, where price action compared to the opening range... so forth and so on.

I reviewed every stock in my list over the past two weeks and one thing was obvious. Stocks trading in the lower (for shorts) or upper (longs) half of the opening range had a much higher probability of a good setup. So this is what I will focus on. That's the first thing I will change this week.

The second change will be my entries. I was very selective before... almost too selective. Always looking for the narrowest range bar entry and bypassing the rest. That needs to change. I need to trade the chart, not the candle. I will actively look for entries occuring around the ORH/L on strong, weak or NR bars. My preference will still be that my entry bar is NR, but more in relation to the previous bars than a % of closing price which is what I was basing it on before.

Will these changes work? Who the hell knows. But I do know these changes will put me focus on the setups that are leaning in the direction I would like the trade to go. 

Just to give you visual examples of what I'm talking about, the two charts below represent the kind of price action and opening range strength/weakness I want to look for.

-Strong first bar (weak for shorts) with price closing in the upper (lower for shorts) half.
-Price action generally staying below/above the halfway point of the OR
-Look for entry at the ORH/L with a closing price at or above (for longs) the ORH (vice versa for shorts). Stay away from entries with long upper tails (longs) or lower tails (shorts). The only exception would be a hanging man setup on a short.

All off (Friday's trades)

The market's choppy but my current streak of consecutive days without a profit is ridiculous. It actually feels like I'll never make another profitable trade :)

I did start looking at sector stocks and checking the strong/weak sectors for candidates. I need to review previous charts and see what I'm doing wrong. Could be that my watchlist is overpopulated with candidates that aren't ideal for my type of trading. 

Traded INFY, PEP, HNZ and I think one other that I can't think of. Anyway, not all were losers but I was red at the end of the day. The thing that keeps me going is the fact that I know a big day is within me and I just need a few good days to get my confidence back up.

Crash of 2008?

With the way stocks have been selling off lately I don't think it is out of the realm of possibility that the NYSE could halt trading if the current selloff continues. As a rule, the NYSE will halt trading if there's a 10% drop in value by 1pm of any trading day (there are other scenarios too). As of right now, that's a 755 point drop... which has happend in the past 6 weeks. I've become so used to major down days but the continued selloff is going to make me more aware of the drops.

Chopping block

Took two trades today and they started out well but then went against me pretty quickly. Fortunately, I had scaled out 1/2 my shares before moving my stops. I missed a nice move up with HBC off a break of the 12pm high. Shorted V and BTU with no luck. Here are the charts for your viewing displeasure.