Saturday, July 28, 2012
Saturday, April 28, 2012
Shorting Rounded Tops
Played MDRX on the long side than the short side today. MDRX had negative news on earnings and had a huge gap down. GMAN said that the stock was holding the $9 level. My entry was @ 9.25. The price was above the 9EMA and 20 SMA and flagging. Sold a quick 1/2 @ 9.50, and 1/4 @ 9.82. I added another position when the stock broke the HOD @ 9.87. Sold a quick 1/2 @ 10. I meant to place my Stop @ 9.85 but placed it @ 9.90 (ITrade's new platform sucks) and got wicked out, or I could have enjoyed the nice run to 10.50!!
The stock topped out @ 10.51 and started forming a rounded top. I shorted at 10.32 (previous level) for a quick gain. 1/2 @ 10.12 and 1/2 @ 10.28. Once the price action broke above 10.24, the trade had reversed and exited. It made a lower high and came back to the same level. I shorted at 10.29 this time, but there was no follow through and exited for scratch.
Here are the 1 minute and 5 minute charts. I saw the trade much better on the 1 minute chart.
I noticed the rounded top as a result of a conversation I had with my buddy @Ktrades this week as we were discussing price action. Thanks!!!
The stock topped out @ 10.51 and started forming a rounded top. I shorted at 10.32 (previous level) for a quick gain. 1/2 @ 10.12 and 1/2 @ 10.28. Once the price action broke above 10.24, the trade had reversed and exited. It made a lower high and came back to the same level. I shorted at 10.29 this time, but there was no follow through and exited for scratch.
Here are the 1 minute and 5 minute charts. I saw the trade much better on the 1 minute chart.
Sunday, April 1, 2012
Shorting Setup for Playbook
From BCLUND
- The overall stock market is overbought, in a trading range, or trending down, not breaking out or oversold, and
- The stock I am shorting–its industry is in a downtrend, and
- The stock I am shorting has entered a downtrend itself.
Look for certain chart patterns (and these apply on any timeframe). I want to see the stock first move in a “false” direction, breaking out to the upside, then reverse and hit a new low for the day, then when it tries to bounce back and rally towards that daily high, I enter the short position as it approached that high and place a stop from .01 to .20 cents above that day’s high price.
Friday, March 30, 2012
Playbook
Context Matters: Why BIDU was a short and CF was not
Last week I wrote a blog that discussed an excellent short setup in BIDU from May 16th. BIDU was trending down on the daily time frame and offered a very low risk intraday trade on the short side after running up on the Open and then forming a rounded top. I tasked one of our trainees to continue to look for similar setups and to execute when she found these trading opportunities.
Today, while broadcasting live on StockTwits.tv I received a question regarding a trade in CF one of our trainees was considering making. He thought that CF presented a good shorting opportunity with a very small clearly defined amount of risk with 1 to 2 points of upside. I wondered if my discussion of the BIDU short had influenced him to think that CF offered a good shorting opportunity as well. Similarly to BIDU last week CF had a powerful up move on the Open then began to move sideways. That is roughly where the similarity ends.
My response on stocktwits.tv regarding this setup can be found here at the 21:30 mark of the video. CF unlike BIDU was not in a downtrend on the daily time frame. It also had just broken above the highs from the prior two trading sessions. And this strength was being exhibited on a day when the market was down over 1%. This was a stock that was trending higher on virtually all time frames. This stock was a long.
In law school one of the common techniques used on exams is to make small changes in fact patterns and then ask students how these changes would alter their conclusions. If you are attempting to be a professional intraday trader I would suggest that you employ this technique to help sharpen your trading skills. When reviewing your work make subtle changes in the conditions that you encountered when examining a stock for a potential trade. How would these changes impact your conclusions?
CF and BIDU charts for your review:
I loved the AMLN Second Day Play near 23, an important level from yesterday. Yesterday AMLN was In Play, could not get above 23, and then did with a nice push in the closing hour. A pullback to near 23 was an A+ Second Day Play. I placed a bid at 23.03 and just missed a fill. AMLN touched every price save my bid. I had that feeling that I am not a part of the market place. Later I bought 23.38 and am just holding now.
Thursday, February 23, 2012
Wednesday, February 22, 2012
Tuesday, February 21, 2012
TraderFeed
The simplest journal I recommend new traders keep is simply to identify--each day--one thing that you did wrong that you'd like to correct the next day and one thing that you did right that you'd like to build upon tomorrow. The reason for this journal format is that it balances the problem emphasis with a solution focus. If you only improve your deficits, at best you'll go from deficient to average. The elite performers in any field identify their strengths, build on those, and find ways to compensate for and work around weaknesses.
In some measure, in some ways, you're *already* the trader you want to be. Once you realize that, it's only a matter of crystallizing your strengths, turning them into habits, and building your consistency. Greatness is more than the relative absence of problems; it's the purposeful cultivation of one's most distinctive capabilities.
(TraderFeed)
http://traderfeed.blogspot.com/2009/01/keys-to-solution-focused-trading.html
My talk at the Annual Meeting of the American Psychiatric Association in Toronto yesterday afternoon concerned solution-focused brief therapy (SFBT). I continue to find it one of the most applicable short-term change technique to trading problems. It has also been used commonly and successfully with relationship and parenting concerns, as well as with overcoming personal barriers to reaching goals.
What makes the solution-focused approach unique is that it starts with the assumption that many problems that emotionally healthy people encounter are the results of their becoming too problem focused. In other words, once people become convinced that they have a problem, their subsequent actions unwittingly reinforce this problem, creating a damaging, circular pattern.
The classic example is the person who doesn't sleep well for a couple of evenings. He becomes convinced that he has an insomnia problem, and now starts worrying about his problem and taking extra steps to *make* himself sleep. All of these simply interfere with normal sleep processes and prolong the original concern.
This occurs with traders as well. Just as there can be chance streaks of wins, there are random losing streaks. Once traders define these as "slumps", they alter their trading, becoming overly cautious at times and overly aggressive to regain losses at other times. These changes to normal, good, planful trading only make the slump worse, creating the self-reinforcing problem.
The solution-focused approach gets away from this problem immersion and, instead, emphasizes *exceptions* to problem patterns. These are potential solutions.
For instance, it is very common that traders even in bad slumps make some good trades and have some good days and weeks. The solution-focused approach takes a hard look at these and pushes traders to identify what they're doing right when they're making money. These exceptions to slumps become positive behaviors that can then be codified as trading rules and mentally rehearsed before each day's trade. Pretty soon, the trader is doing more of what works and no longer feels in a slump.
The solution-focused approach suggests that sometimes the problem is not a deeply rooted psychological conflict. Sometimes we become too problem focused for our own good. No one ever succeeded merely by reducing or eliminating negatives. Our strengths are all we have to build upon.
In some measure, in some ways, you're *already* the trader you want to be. Once you realize that, it's only a matter of crystallizing your strengths, turning them into habits, and building your consistency. Greatness is more than the relative absence of problems; it's the purposeful cultivation of one's most distinctive capabilities.
(TraderFeed)
http://traderfeed.blogspot.com/2009/01/keys-to-solution-focused-trading.html
Letting Profits Run: A Guide to Becoming Your Own Trading Coach
My most recent post emphasized many of the basics that enable people to become their own trading coaches. For this last post in the series, let's apply those basics to one of the most common trading problems that people describe to me: the difficulty of letting profits run.
From the previous post, it should be clear why this is such a difficulty:We set our profit targets and trade strategy while we are in one state of mind but then, as the trade progresses, we enter an entirely new state. That new state very often involves worried thoughts about losing unrealized profits or having gains turn into losses. It generally brings an elevated heart rate, increased muscle tension, and more rapid and shallow breathing. As we become aware of the nervous feelings, that helps to perpetuate the negative thoughts and altered physical state, which in turn can amplify the anxiety. Very often, cutting positions short before profits can run is simply a coping device to manage this anxious state. We exit the position for emotional relief, not for reasons of sound strategy and money management.
The solution focused approach calls on us to review those occasions in which we have been able, in some measure, to let profits run--even just a bit. What did we do differently on those occasions? Those exceptions from our problem patterns are what we have to build upon: they are our potential solutions.
In my case as a trader, there are several things I've done differently when I've been successful in letting profits run:
* I have planned the trade well in advance with research; it is not a spontaneous trade, so I've had time to think clearly about what I want to do.
* I have a clear profit target in mind based on research and refuse to waver from that target unless the market takes me out with a predefined stop. I consider myself a person of integrity, so I tell myself that I have to show integrity and loyalty to my trade idea and target;
* I don't follow the position tick for tick. Either the trade will hit my target or it will hit my stop. I make a conscious effort to let go and not micromanage the trade;
* I keep myself calm and clearly focused by purposely getting up from my chair, doing some stretches, breathing deeply, and getting away from the screen. I keep myself in a state that is incompatible with anxiety;
* I rehearse constructive self-talk during the trade. I tell myself that I've done my preparation and established my edge. Any individual trade can go against me, but if I take all the good trades I can, eventually I'll benefit from good odds and a good risk-reward ratio. If I lose money on the trade, I'll figure out why and what that might be telling me about the current market.
All of these steps, taken together, form a template for how I manage to hold onto positions to maximize profits. Now the key is to turn this template into a habit pattern. I want it to become automatic--an internalized part of me.
To accomplish this, I wear my heart monitor and go out for a morning jog prior to the market open. I use the monitor to ensure that I maintain an elevated heart rate and a good jogging pace. While I'm running, I'm mentally rehearsing each aspect of my template. I'm imagining my trades, and I'm imagining what I'll do if they move in my favor. I rehearse the proper self-talk, and I imagine getting away from the screen and staying loose. I also imagine, with plenty of emotion, how happy I'll be sticking to my ideas and reaping enhanced profits. In short, I'm getting physically *and* emotionally pumped up during the jog.
This becomes a routine every morning. Repetition and powerful emotion are the keys to turning patterns into routines and setting new spots on our radio dial of consciousness. After a while, those thoughts, images, and feelings from my jogs begin to appear on their own, as they increasingly become familiar parts of me. Then, during my break from the screen while I'm letting a trade run, I go on my treadmill for a few minutes or simply jog in place. I get myself back into the pumped up state and recruit everything I've rehearsed.Instead of feeling anxious while riding the trade, I'm feeling energized.
Again and again, during each trading day.
Notice that you could substitute any desired behavior for the holding onto trades and make this technique work for you. It does take practice and repetition, but once you have a positive habit pattern, you have it potentially for life. The key is focusing on your strengths and turning those into patterns that can be triggered when you enter into associated states of mind and body. In my example, I used jogging to create the unique state. I could have just as easily chosen meditation or self-hypnosis.
Once you grasp this method and become good at it, there are many positive patterns you can program--in your work, relationships, and trading. There is no need to become bogged down in problems when you can build upon your own solutions.
From the previous post, it should be clear why this is such a difficulty:We set our profit targets and trade strategy while we are in one state of mind but then, as the trade progresses, we enter an entirely new state. That new state very often involves worried thoughts about losing unrealized profits or having gains turn into losses. It generally brings an elevated heart rate, increased muscle tension, and more rapid and shallow breathing. As we become aware of the nervous feelings, that helps to perpetuate the negative thoughts and altered physical state, which in turn can amplify the anxiety. Very often, cutting positions short before profits can run is simply a coping device to manage this anxious state. We exit the position for emotional relief, not for reasons of sound strategy and money management.
The solution focused approach calls on us to review those occasions in which we have been able, in some measure, to let profits run--even just a bit. What did we do differently on those occasions? Those exceptions from our problem patterns are what we have to build upon: they are our potential solutions.
In my case as a trader, there are several things I've done differently when I've been successful in letting profits run:
* I have planned the trade well in advance with research; it is not a spontaneous trade, so I've had time to think clearly about what I want to do.
* I have a clear profit target in mind based on research and refuse to waver from that target unless the market takes me out with a predefined stop. I consider myself a person of integrity, so I tell myself that I have to show integrity and loyalty to my trade idea and target;
* I don't follow the position tick for tick. Either the trade will hit my target or it will hit my stop. I make a conscious effort to let go and not micromanage the trade;
* I keep myself calm and clearly focused by purposely getting up from my chair, doing some stretches, breathing deeply, and getting away from the screen. I keep myself in a state that is incompatible with anxiety;
* I rehearse constructive self-talk during the trade. I tell myself that I've done my preparation and established my edge. Any individual trade can go against me, but if I take all the good trades I can, eventually I'll benefit from good odds and a good risk-reward ratio. If I lose money on the trade, I'll figure out why and what that might be telling me about the current market.
All of these steps, taken together, form a template for how I manage to hold onto positions to maximize profits. Now the key is to turn this template into a habit pattern. I want it to become automatic--an internalized part of me.
To accomplish this, I wear my heart monitor and go out for a morning jog prior to the market open. I use the monitor to ensure that I maintain an elevated heart rate and a good jogging pace. While I'm running, I'm mentally rehearsing each aspect of my template. I'm imagining my trades, and I'm imagining what I'll do if they move in my favor. I rehearse the proper self-talk, and I imagine getting away from the screen and staying loose. I also imagine, with plenty of emotion, how happy I'll be sticking to my ideas and reaping enhanced profits. In short, I'm getting physically *and* emotionally pumped up during the jog.
This becomes a routine every morning. Repetition and powerful emotion are the keys to turning patterns into routines and setting new spots on our radio dial of consciousness. After a while, those thoughts, images, and feelings from my jogs begin to appear on their own, as they increasingly become familiar parts of me. Then, during my break from the screen while I'm letting a trade run, I go on my treadmill for a few minutes or simply jog in place. I get myself back into the pumped up state and recruit everything I've rehearsed.Instead of feeling anxious while riding the trade, I'm feeling energized.
Again and again, during each trading day.
Notice that you could substitute any desired behavior for the holding onto trades and make this technique work for you. It does take practice and repetition, but once you have a positive habit pattern, you have it potentially for life. The key is focusing on your strengths and turning those into patterns that can be triggered when you enter into associated states of mind and body. In my example, I used jogging to create the unique state. I could have just as easily chosen meditation or self-hypnosis.
Once you grasp this method and become good at it, there are many positive patterns you can program--in your work, relationships, and trading. There is no need to become bogged down in problems when you can build upon your own solutions.
Finding Solutions to Your Trading Problems
My talk at the Annual Meeting of the American Psychiatric Association in Toronto yesterday afternoon concerned solution-focused brief therapy (SFBT). I continue to find it one of the most applicable short-term change technique to trading problems. It has also been used commonly and successfully with relationship and parenting concerns, as well as with overcoming personal barriers to reaching goals.
What makes the solution-focused approach unique is that it starts with the assumption that many problems that emotionally healthy people encounter are the results of their becoming too problem focused. In other words, once people become convinced that they have a problem, their subsequent actions unwittingly reinforce this problem, creating a damaging, circular pattern.
The classic example is the person who doesn't sleep well for a couple of evenings. He becomes convinced that he has an insomnia problem, and now starts worrying about his problem and taking extra steps to *make* himself sleep. All of these simply interfere with normal sleep processes and prolong the original concern.
This occurs with traders as well. Just as there can be chance streaks of wins, there are random losing streaks. Once traders define these as "slumps", they alter their trading, becoming overly cautious at times and overly aggressive to regain losses at other times. These changes to normal, good, planful trading only make the slump worse, creating the self-reinforcing problem.
The solution-focused approach gets away from this problem immersion and, instead, emphasizes *exceptions* to problem patterns. These are potential solutions.
For instance, it is very common that traders even in bad slumps make some good trades and have some good days and weeks. The solution-focused approach takes a hard look at these and pushes traders to identify what they're doing right when they're making money. These exceptions to slumps become positive behaviors that can then be codified as trading rules and mentally rehearsed before each day's trade. Pretty soon, the trader is doing more of what works and no longer feels in a slump.
The solution-focused approach suggests that sometimes the problem is not a deeply rooted psychological conflict. Sometimes we become too problem focused for our own good. No one ever succeeded merely by reducing or eliminating negatives. Our strengths are all we have to build upon.
Monday, February 20, 2012
Thursday, February 16, 2012
Saturday, February 11, 2012
Stockbee Core Trading Concepts
If you are serious about your trading there are some concepts you must know in significant details. Those concepts will help you build a strong foundation on which you can build a trading system. There are seven concepts you should study:
- Momentum : If you understand this you will understand trends and mean reversion. You will understand why and how momentum works in the market. Most indicators are momentum based. Trend following and buying strength also works, so does mean reversion. They are all part of the momentum phenomenon.
- Market Breadth: Stock markets are composite markets. The overall move in market is an aggregate of moves of several hundred or several thousand stocks. So the level of participation in a move is important.
- Equity Selection: Because the overall market is a composite of many individual moves, it becomes critical to select right kind of stocks from the universe of stocks. Hence equity selection is extremely critical. You should know various ways in which one can select equities.
- Market Anomalies: Market anomalies are the distortions in the market. If you base your trading on a proven and statistically significant anomaly, you will be profitable. Absent that no amount of indicators will help you. A through understanding of anomalies will give you an edge.
- Market Microstructure: Market Microstructure is a branch of finance concerned with the details of how exchange occurs in markets. Understanding this will tell you how the market operates. The concept of market microstructre is very critical if you are trading very small time frames or are a day trader. Because to be successful on those time frame you need to find exploitable anomalies in market microstructure. You need to understand role played by market makers, automated programs, arbitragers, large fund buyers and so on. Their tactics and behaviour creates certain patterns
- Growth investing : Growth investors buy stocks of companies growing faster than the average company in the market.
- Value investing : Value investors buy stocks of companies which are cheap or out of favor.
Saturday, February 4, 2012
Earnings February 6-10
http://ibankcoin.com/rcblog/2012/02/04/earnings-on-deck-2/
Monday:
- Anadarko Petroleum Corp APC
- Changyou.com Ltd CYOU
- Coinstar, Inc. CSTR
- Energy Conversion Devices Inc ENER
- Quepasa Corp QPSA
- Rex Energy Corp REXX
- Veeco Instruments Inc VECO
- Yum! Brands Inc YUM
Tuesday:
- Buffalo Wild Wings Inc BWLD
- China Bak Battery Inc CBAK
- Coca-Cola Co KO
- Compass Minerals International Inc CMP
- Formfactor Inc FORM
- Glu Mobile Inc GLUU
- OpenTable Inc OPEN
- Panera Bread Co PNRA
- Valueclick Inc VCLK
- Walt Disney Co DIS
- Western Union Co WU
Wednesday:
- Akamai Technologies Inc AKAM
- Andersons Inc ANDE
- CISCO Systems Inc CSCO
- Groupon Inc GRPN
- Level 3 Communications Inc LVLT
- Nanometrics Inc NANO
- Ralph Lauren Corp RL
- Sprint Nextel Corp S
- TripAdvisor Inc TRIP
- TriQuint Semiconductor Inc TQNT
- Visa Inc V
- Whole Foods Market Inc WFM
Thursday:
- Activision Blizzard Inc ATVI
- American Superconductor Corp AMSC
- Bunge Ltd BG
- Capstone Turbine Corp CPST
- Dunkin Brands Group Inc DNKN
- Expedia Inc EXPE
- LinkedIn Corp LNKD
- Nuance Communications Inc NUAN
- PepsiCo, Inc. PEP
- Sirius XM Radio Inc SIRI
- Stamps.com Inc STMP
- True Religion Apparel Inc TRLG
Friday:
- Arch Coal Inc ACI
Intraday Patterns to Focus on
My trading has been sucking ass. I looked back at the charts I posted and noticed a very strong trend. The good trades all have a similar setup. All of the bad trades and losing trades have no setup. Mostly, I try to enter on the break of HOD with a base, or consolidation, hence the top picking.
Here are the setups that I will focus on in the coming weeks. I will only trade these setups and I will use 1/2 size until I can start improving my win%.
Here are the setups that I will focus on in the coming weeks. I will only trade these setups and I will use 1/2 size until I can start improving my win%.
Gearing Back
A typical pattern for the successful intraday trader is:
lose money
lose less money
flat
consistently positive
expand your playbook on other trades
add size to your best trades which grows your P$L
But if you are just at the stage of losing money you should not even be thinking about adding size. There should be no delusion that you are close to breaking out as a trader. You are not. Your next steps are above. And you are not going to get to the stage where you should be sizing up for many stages. So be realistic about your work ahead and be patient.
Friday, February 3, 2012
Thursday, February 2, 2012
Trading an Alert Setup
Great post by @szaman, http://nyctrader.blogspot.com/ $Study. I get caught way too often chasing my alerts!!!!.
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