Nov 27, 2008

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.

Nov 25, 2008

No trades

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

Nov 24, 2008

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.

Nov 23, 2008

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.

Nov 22, 2008

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.

Nov 21, 2008

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.

Nov 20, 2008

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.

Nov 19, 2008

You know the saying...

No trades. Getting kinda redundant this week. Just a silly market, I tell ya... silly.

iPhone 3g unlock

Alright... so the headline may be decieving, but it's true nonetheless. You all know I bought (or my wife bought for me) a US 3G iPhone back in August. She wanted to surprise me and had no idea about the 'unlock' aspect. So, I haven't been able to use it as a phone and everything else it has to offer since getting it. Until now. I've been waiting for the smart folks to figure out how to unlock the phone but in the meantime I came across this 'piggyback' sim card that fits on top of the actual sim card and into the tray. Once you slide it in, you enter the unlock code... wait a couple of seconds and BAM - it works. I'm enjoying my phone as it should be enjoyed. Needless to say, I'm a happy guy. The iPhone is badass. So, if you're interested, here's the website of the 'piggyback' card:

I actually ended buying from an ebay seller here in France and there were no problems at all. This is certainly a nice, temporary solution until the unlock happens (if it ever does). The only drawback is you can sync your iPhone with the sim card inserted. Need to take it out - but it syncs without any issues.

Nov 18, 2008

Just no luck

I was looking to go long early on and HD presented a good enough opportunity off a break of the 11am bar high. I took a smaller position and scaled out so the loss wasn't that bad. But if I back up about :15 earlier, I missed a great entry in RIMM off the 10:45 bar high. I can get pretty distracted during trading with two kids running around and that was obviously the case here. Just bugs the shit out of me when I miss the one good opportunity I may have had in the day. Later on I shorted MET (2:15 bar low) and that didn't work out but I scaled out to breakeven. 

Nov 17, 2008

No trades

And I'm very happy with that. Like TraderAM, I've been looking at indicators(mainly TRIN) to help gauge the general direction of the market. I'm not really guessing where a bottom or top is going to occur, I just want to make sure I'm going with the trend. Anyway... the trend today was very stop and go. Couldn't find any consistency and didn't want to waste money in a choppy market. There were entries for me to take but the potential profit always proved to be short lived.

Nov 15, 2008

Friday's trades

Not a huge list of gappers to choose from but I shorted QCOM off a break of the 10:45 bar low and, after reaching 1R, I moved my stop to breakeven which was hit a few bars later. Also shorted HPQ off a break of the 11:15 bar low and, like QCOM - it hit 1R, moved my stop and was stopped out later. I really wanted to enter HPQ off a break of the 10am bar low but couldn't pull the trigger.

The market rallied later in the day but I couldn't find any setups that I like.

Nov 13, 2008

No trades

Had stuff I needed to do. Looking at charts now... seems like there were a few candidates I probably would've taken.

Frustratingly breakeven (11/12)

I am not managing my trades well at all. I'm trading not to lose money instead of trading to win. With that being said... my only losing trade today was MMM (traded it twice). I had some nice entries in AMZN and HPQ that - by the time I finished scaling out and exiting early - left me with just more than my losses. After an initial move down at around 10:15, the market seemed to chop around a bit till later in the day.

The red arrow in the AMZN chart represents a second entry that I was too slow to get into (or price dropped too fast). 

Nov 11, 2008


Not a lot to write about today. Traded HD, EWZ, MOS, AXP. The first 3 provided some nice small gains until AXP wiped it out. 

Nov 10, 2008

Choppy day

I always seem to start the day off with losses and work my way out of a hole. That's just not a good thing for me as I then tend to settle for a breakeven day. Went long PFE and T for losses but then found some nice short setups in PBR and EEM (gap up candidates). My exit strategy prevented me from seeing some nice profit with these trades but it did get me back to breakeven for the day and they are setups I hope to continue to spot.

Nov 8, 2008

Fridays trades

Traded quite a bit yesterday, but I really shouldn't have taken at least 3 of my trades. It's not that they were bad setups but the entries just weren't were I like them to be. FMCN, MT and DIS proved to be the account drainers while FLR, WFC and CXO were the account gainers. Luckily, the gainers were more than the drainers.
I particularly liked my CXO trade as it demonstrates something that I'm trying to do more consistenly. That is, shorting a gap up and vice versa. This is how I can increase my opportunities and, if correct, can be very profitable. I shorted off a break of the 11:45 candle as price fell below the 5ema on the previous bar and then showed consideralbe weakness against the 5ema. I played my exit safe and took profit at the $22 level.
FLR was a nice gain but not a good looking chart. However, I liked my entry off a break of the 11:15 bar high as it was an nr7/nr3 combo. It shot up quickly and and decided to fully exit at close to a dollar gain.

I missed a couple of trades that would've helped my PnL but I liked the opportunities I took.

Nov 6, 2008

What's up?

First off... congratulations to all of you who voted. Secondly, congratulations to all who voted for Obama, like myself. Pretty amazing to live during a time of enormous history. 

Now, on to more important things. What have I been up to? Well, I've traded futures, ETFs, used different timeframes and basically 'blew up' the way I had been trading. Why would I do this? Well, that's a very good question. I think part of it is that I'm a little fucking crazy. The other part is I was bored. The way I was compiling my watchlist, combined with the market and how I traded just wasn't producing a lot of trades every day. Then I got this wild idea in my head that if I'm going to be a successful trader for the rest of my life I need to find a way to trade every single day and trade a lot. Believe me when I tell you that I fully explored the 'trading a lot' angle. For about a week I just traded the QQQQs off the 1-min chart. I think one day I had about 18 roundtrip trades. This would've been great had I made shitloads of money. But I think I was up about $100 at the end of the day after being down $800 early on. 

My account balance has taken a beating the past month. But you know what... it was all worth it. Sure, I'd like to have that money back but in the end, I have a much greater understanding of trading now than I did before. I understand how the highest volume ETFs and futures basically follow the same patterns. Another reason why I wanted to blow everything up is to try to trade just a few stocks a day instead of the normal 'gapper madness' I was used to. While this sounds practical, in reality... I much prefer the diversity of the gappers. However, on the days when the gappers aren't there, at least I know where to turn for other opportunities. And I guess that was the purpose of it all. A trader needs opportunities every day.

So, where am I at now? Well, for the past two weeks I've been trading 'gappers' off the 3-min chart and treated the first hour of trading a little different than I did the rest of the trading day. There are some good opportunities early on if you're tuned in. But the problem with this strategy is that if you miss one trade... that can screw up your entire day. That could've been the trade the offset the shitty ones. It was very fast and - with my current schedule - just not feasible. So I've come full circle again. A realization that just occured about a half hour ago. I am going to continue trading off the :15 timeframe to 'slow' things down but I am expanding my watchlist and not deleting any candidates. Of course, anything less than $15 or over $100 will be removed, but I need to remove some of my previous habits that limited my opportunities. 

I've got my work cut out for me to get back to where I was but I'm pretty confident I can get there. Thanks for your patience and feedback and I hope my readers have stuck around.