I've been sitting out these last few days because I need to let my funds settle so I can start moving some out. I just so happen decided to pick these days off while the market shoots about 500 points. Oh well though. I probably could of made a pretty penny these last couple days but you can't trade everything all the time.
Hopefully, I'll be back in business on Monday or Tuesday. Until then, I'm just watching the action.
Spent about 45 minutes going over a lot of charts and found PRGO right before I almost called it quits for the day. It's funny how you will succeed right after the point you feel there's no hope.
Got in on PRGO immediately when I saw it at 30.59 I liked how it a small breakout being setup just under R2, it had already broken out when I saw it so I missed the initial break but still rode the rest of the momentum to my targets. I unloaded my first lot a little early since I didn't account for slippage when I got in and my targets were off a little.
My first 50% lot was sold at 31.10 instead of 31.20 which would of been my 2% target but oh well. After I sold I saw it dip with the Q's which made me think we might be getting weaker. So I sold my second lot at 31.05. It looks to be shooting up a little more now that I'm writing this. Momentum is dying but it's still increasing on decent volume. Whatever happens, happens but I'm stoked about this trade.
EDIT: I've developed a new trading plan that I've been following since Early January, 2008.
Check it out here: http://tradeswing.blogspot.com/2008/01/trading-plan-residual-morning-momentum.html
I've been doing a lot of thinking and going over my past winners and comparing them to my recent losers to see if I can spot some differences and then to eliminate those differences.
The loser I had today was moving on weak volume. It had momentum but the volume wasn't there to back it up and sustain the move. I'm going to use this post to write out in detail exactly what it is I'm looking for. I'm going to print this out and lay it on my keyboard and every time I come to my PC to trade, I'll see the plan, read it and keep a fresh image of exactly what it is I'm looking for.
Selection Criteria for Winning Candidate:
1) Momentum has to be in a steady up trend. Nothing moving straight up and not dead slow either.
2) The 10 EMA (red line) for intra day volume has to be increasing and showing moderate to heavy white volume. Volume will confirm whether the momentum is good or not.
3) Price action of the stock must be in an up trend, confirming the volume backed behind the increase.
4) Ideally, the stock should be going against the overall trend and should be obvious that the stock is taking off whether the market is up or down.
5) The wicks on the candles should be very small and/or almost non existent. Do not trade long wicked candle patterns. Pattern should be tight and concise.
Entry:
1) If above criteria has been met then don't hesitate to buy at market value.
Exit:
1) Stop will be placed in a spot below entry that's not too far away but not too close so that I'll be stopped out immediately. This will completely discretionary. Risk will always be 0.5% of total equity unless a 2.5% draw down has been reached, at that point risk will be cut to 0.25%
2) When a 2% increase has been reached from the point of entry, stop will be raised to break even. The selling of 50% of shares at this 2% increase will be mandatory.
3) When the 2% mark has been passed and the price action is still increasing, the stop will be trailed continuously until stopped out. Once the stop has been increased, it won't be lowered for anything.
Oh man, where do I begin. Maybe it's from all the turkey I ate or that I missed a day or what, but I screwed up big time. My entry was fine I got in at 30.04 and I put my stop at 29.80. Now, I have no idea what happened but apparently I canceled my stop order and had no idea because when TPX hit 29.80 I wasn't being sold. I go to check my order status and it says I'm canceled. A few curse words later and I put in a new stop loss at 29.75 and this time I put in a market order to sell not a stop loss. So I immediately sold out at 29.68.
1.5R loss because I can't pay attention to what the hell I'm doing. The black line was my initial stop loss but the green line shows where I actually got out.
Watched the market conditions for about 20 mins. VIX was up but the Q's seem to be stable and even inching it's way higher as all the short funds I watch were going up, etc. It was weird. I'd say 80% of my watchlist was in the red but I picked out QDEL and liked what I saw, and wanted to get in. I bought in at 18.46. Initially it looked good, I liked what it was doing. Then the Q's started to fall apart and the tick index was going off at -1000 and everything started to collapse, along with QDEL.
My initial stop was at 18.20 but I jumped ship when it hit 18.35 and got filled at 18.32. It looks to be stabilizing a little bit now at 18.29 while the Q's make lower lows.
I'm happy with this trade. Saw a pattern I liked and I took it. I bailed before it hit bottom which was a wise move as I saved some cash. I'm bummed it didn't work out, but hey, there's always next time and I know I'll make it back.
Had another great day. The market rally at the open definitely helped me out a lot. I got in on ISIS at 16.70 with my initial stop at 16.40. My stop was so wide because I had to account for the lower buying power in my account but once I got in I bumped it to 16.55
It kept rallying like I thought it might, momentum and volume looked great all the way until we hit R2 which I sold half my shares, 6 cents lower than my target because I didn't know if it would have much steam after breaking the line. It did ht my first sell target and before the candle turned blue I saw the momentum seemed to flatten out at the top and sure enough I watched it decline as I finally got stopped out at 16.84, 1 cent below my raised stop.
Overall, I'm very happy with my performance. I stuck with my plan even though I had thoughts of selling before it hit my targets, I stayed discipline and came home with some nice performance numbers to add to my trade log.
Went long on a massive wide spread decline. I thought I might be able to duck and run as the bullets were flying by my head. I got in on PAY at 44.81 which is a pretty high price in retrospect. I bought on a huge tall shadow and then it fell big time and slowly made its way to where I got in and then basically declined after that.
It was strong at first and then remained strong for about 30 minutes after everything started to decline and then PAY finally broke down and gave in to the wide spread selling and started selling off as well. My initial stop was around 44 but I raised it to 44.20 where I was finally stopped out.
Ok, so I'm looking around for a good trade even though I probably won't find one and I shouldn't be trading anyway. I come across CCC and it showed a patter I've been trading a lot only problem was that I missed the breakout and got in a little late at 12.37
I'm sitting here waiting for about an hour for it to do something. I had my stop initially at 12.10 but soon raised it to 12.20 to try and cut some risk. I had a sell order to get rid of 25% of my shares at 12.47 I canceled the order about 10 seconds before it hit 12.47 and I decided to sell my entire position at 12.37 and just get out.
lol, I'm a little pissed. I mean, I got in waited and waited for it to show me something as to why I should still be in this trade. I didn't see anything that should keep me in. I sell, and then it shoots up. Oh well.
I didn't execute my plan. I got bored and anxious and wanted out. I'm pissed at myself not because I missed out on a nice chunk of cash but like an idiot, I didn't follow my plan. I knew when I wanted to sell for a profit, I knew when I was going to get out if the it goes against me, yet I sold based on my feelings not on my plan and I paid the price.
I got in late, and got out early.
Market is crumbling right now. Every chart I pulled up looked like a nice setup but then it fell apart and deflated right in front of me as the Q's were tanking fast. I thought I might be able to find a solid strong stock but doesn't look like I will. I missed my chance to go short so I won't be chasing the ride.
I might just sit on my hands today and watch the action from the sidelines, which is ok because I need to let my funds settle in my account so I can move some out.
We'll see what happens.
It's about 7:10am PST and the NYSE is about equal in advances and declines but we've made 113 new lows already and only 21 highs. Not a good start to finish out the week.
I got in on STV a little too early I think. I jumped the gun and bought on the huge tall shadow at 37.74 and had to sit and wait for it to develop without a profit. It finally had a small break out which I was looking for but it happened about 5 or 6 candles later. Started unloading at 1% and 2% gains (something I might ease up on when I have to start paying commissions, it's really going to kill me). Finally got out at 38.23
I was sooo close to buying CRNT at the open for 13.45 but it was one of those things again. Something about it didn't seem right. It's hard for me to put it into words but I didn't like what it was doing. So I left that one and went to look for a solid trade and didn't find STV for about 30 minutes.
I broke even with my stop as soon as I could without being too aggressive. When I saw the candles falling down to my stop I sold the last lot but I had a feeling this was just a way to kill all the people who had stops before it rallied again. Which it looks to be doing a little bit now on the 3 min chart of STV. Oh well, that's part of the game. I'm happy with this trade.
I was looking around my watch list for about 25 minutes looking at a lot of charts and to see if I could spot a strong one. I almost bought RDN and LEH which would of been at their peaks but I didn't buy them. Something about them didn't seem right. I came across HSOA and I loved the momentum it had and it was backed by the strong volume along with going against the QQQQ's (something I've really been keeping an eye out for). I also loved how it was flattening out under resistance but still making higher lows. I hesitated to get in at 2.39 and sure enough I saw it blast through resistance. I got my order in at 2.45 and unloaded my first lot at 2.48 and then again at 2.53
I didn't raise my stop that much because it flattened out a bit and I didn't want to be too aggressive so I left it alone. When it started blasting up like crazy is when I really started moving my stop to break even and then to 2.60 which I got close to be stopped out. Once the blast off seemed to settle I saw the selling pressure increase for the first time since this whole move and I figured a decline was coming. I was happy with what I made and decided to unload the last 50% at 2.67 Another wise move as it ended up falling to about 2.56 as I'm writing this and watching the chart.
I was watching the QQQQ's and I was watching how it seemed to go up and up and I asked myself, "If I owned shares, would now be a good time to sell" I said yes, so I went short which in retrospect was the peak of the Q's I got in on QID at 40.53 and my initial stop was at 40.10 with a 0.25% equity risk. I cut down the risk big time on this one because of the fact that I was bottom fishing and I didn't want to risk my usual 1% on this.
Qid started turning around beautifully right after I got in. It was shooting up a little and I unloaded 50% at 40.79 and raised my stop to break even. I was being very aggressive with this trade. I had a market order in at 40.53 and I left to go do something I came back and I see the shadow of a candle hit my stop and I got filled at 40.58
I was probably being a little too aggressive because I got stopped out and I think QID can keep going higher. Q's are making lower highs and are sitting on support which I think it'll break. But what's done is done. I'm happy with my performance.
I've been following a pretty tight criteria for picking my stocks I made about a week ago and what's even better is I've had the discipline to stick to that criteria and it's paying off, more ways than one.
Got in on DSX at 30.86 just before it broke through resistance as it looked like it would. It was showing a small ascending triangle. I started unloading my shares pretty fast as it blew by resistance and started raising my stop after I unloaded. Stock kept rallying and what I was impressed with is that when the Q's started to make that first dip DSX held it's ground and went neutral by showing us some Doji's. I'd like seeing that, left for a few minutes and came back and saw it was up around 32. At that point I started trailing my stop pretty tightly. I knew I was going to get stopped out at 31.75 which I did and then I'd see it rally again lol. It's funny how those guys will try and wipe out everyone they can before they take off again. It's cut throat out there...
I've been very happy with my performance lately. I like the fact that I'm staying discipline and sticking to my guns, however I'll still need to tweak how I trail my stop but I'm happy overall.
Didn't see too many stocks in the morning that fit my criteria so I went to see what SMRT was doing. It setup exactly the same way it did on Friday so I took it immediately.
Got in at 7.07, I kind of figured it would pullback like it did, but I didn't know when. I unloaded the first 25% once I hit a 1% gain. The second lot I bailed a little early not quite a 2% gain but I didn't like how it was hitting resistance on weak volume so I unloaded the second 25% slightly early. From there I broke even by raising my stop to my entry price and trailed it as the price kept increasing. Volume looked great, momentum was solid and going in the path of least resistance. I did however, sell my last 50% at 7.27 I didn't like how the momentum was declining pretty fast and there wasn't much volume but selling. I guess it was more of an impulse trade and I was getting bored lol.
Now I know why pro's say that good trading should be boring. I was bored as well and actually got pissed as the price was increasing because I knew I'd be sitting longer waiting to sell at my target. What's been keeping me in is I've been listening to a lot of music. I might even just start surfing the web and read some tech articles as the stock is doing its thing, and stick to my guns (stop's) no matter what.
Had an amazing trade today with SMRT. Right after I went short at the open and realized it was wrong. I sat back and looked for a strong stock going against the crowd, and I found one.
Got in at 6.51 Stock increased 1% and I unloaded 25% of my shares at 6.58 at that same time I cut my risk in half by raising my stop from 6.40 to 6.45. Stock rallied another 1% and unloaded an additional 25% of my shares at 6.65 At this point I raised my stop to break even to give myself a risk free environment to work with.
I let the rest of the shares ride while trailing my stop behind it. For every 1.5%-2% increase in price I raised my stop 0.5%. When it hit the R2 line at 6.90 I was more aggressive with my stop and raised it to 6.80 because I didn't think it'd break an R2 line. Volume was declining and RSI was weakening so I decided to be aggressive. It ended up falling to 6.80 after it tried for about an hour to break R2 and I got stopped out at 6.79
After I got in on TWM I raised my stop to 70.90 and left do something and started thinking about why my ordered took so long to get filled. I realized that it had to of been the post market news and decline yesterday about wachovia or something. I'm sure people got freaked and put in market orders to sell at the open of today. At the same time people were putting in buy orders for TWM. Once the market opened everything was getting filled at once and would explain why it took 15 minutes for me to get filled. Once the orders got filled we started rallying back up. Today will probably be flat for the most part maybe even a close higher than the open but I could be wrong.
I got out TWM when I got back and realized I was in a bad trade and sold before it hit my stop. Which I'm glad I did because I would of gotten stopped out anyway so I saved my self some moola.
Oh man, I can't believe this, hah! It took Zecco 15 minutes to fill a buy order for TWM. A Short fund that I like to buy when I want to short the market. I wanted to get right at the open as I saw nothing but huge amounts of stock being distributed in big volume. I wanted to get in at 71-71.20 but got filled at 71.56 Stop point is at 70.50
I'll be scaling out at 2% gain increments. When I hit my first 2% I'll move my stop to break even.
I'll post the chart when the trade ends.
Went short a little late but I thought the sell off had more juice in it to keep going. Got in on TWM at 71.19 just under resistance but it was looking good. It shot through resistance and turned it into support which was a good sign. It had one more last leg up and peaked and I thought I should unload some shares at this point but I didn't (I was waiting for a 3% gain to unload instead of a 2%, a little aggressive). I was stopped out at 70.40
I held on as it was going neutral. I did notice something that told me I should sell. TWM was on a downtrend but was holding support. A clear sign that a breakdown is in the works. What made me hold on was that I heard a tid bit on CNBC and some guy thought we'd be going lower before the close. That's the only thing that kept me in. If I hadn't heard that there's a pretty good chance I would of got out. CNBC is killin me. I like watching it because it's entertaining and I never do what they talk about unless it's the opposite. But this time it just got stuck in my head and bounced around and I wouldn't sell because of that.
Very pleased with with my performance and how I handled ONXX. I watched to see which stocks were being accumulated right at the open and ONXX shi9ned right away up about 50% in daily volume in the first 5 minutes of the open. Pulled up the chart and saw it had some resistance to break through at 52.50 before I'd get in.
A few minutes later, the next thing I know it's up at 53 and jumping around higher. I waited for a small pullback and got in at 53.05. Saw a nice move right after that as the buying volume kept pouring in and sold half my shares at 53.71 and raised my stop to 53. I let the last bunch of my shares ride it out until it either looked like it might reverse or hit my imaginary trailing stop. It kept rising and when hit it 55 I raised my trailing stop to 54. Right after that It seemed to pullback pretty hard and got down to 54.02 not exactly my stop point but I sold when it hit that point and got out at 54.12
Right after that it looked to jump higher. I should of held my ground and waited for it to really hit my target of 54 instead of chickening out and bailing when it was only 2 cents above it. Could of extracted a little more but overall, I'm very happy with my performance.
Took a shot at QID again. This time I felt confident in the trade. I was watching QID fall down as the market was rallying up and it looked like a good time to short the market for a quick pop. QID was right above some support and as the candle was forming it stayed a Doji for a while before it finished as a tall white candle. I got in during the Doji time. I waited for it to rally a little as it did and once I felt a good time to unload came around I got rid of 50% of my shares. At that same time I raised my stop to 34.90 to bring a risk free environment. I watched it a few more minutes and decided to unload the rest at 35.03 as the ride seemed to be close, if not already, over.
See, if I just would of been patient earlier instead of making those idiotic trades I could of really traded this. I tried putting in the order but apparently I don't have anymore buying power. Bummer... Patience young Grass Hopper...
I got stopped out of CROX but I'm happy with the overall trade. CROX was up on some really good volume. I think around 90% of their daily volume in the 30 minutes. That got me interested so I pulled up the chart and watched the rally. Saw it pullback which I was also looking for and got in. Once I was in it established support which I liked. I had a target of 43.40 to sell 50% of my shares. Once I sold half I was going to raise my stop to break even so I could have the rest of my shares in a risk free environment.
CROX was following the market very closely and started falling as the Q's were heading down and the beginning of the sell off started. I got stopped out around 62.20 and I got in at 43.05 My plan was executed flawlessly. Once I got stopped out subconsciously I'm sure I was mad that's probably why I went to go chase QID on the rally.
Basically I went chasing after a rally. Market was falling and kept breaking support after support and I eventually went short at the bottom. I'm pissed about this trade because I did something that I'm trying to get myself not too. I'm working on the fact that I don't need to be trading every single day chasing opportunity. Every time I do that, I lose money, over and over and I can't get it into my head that trading like that is wrong.
Again, what I need to focus on is being carefree, but not reckless. What I'm doing now is being carefree and reckless. Man, that's easier said than done.
I got out before my stop was hit because it stopped acting the way I wanted it too. Looked like the decline was over and realized I made an idiotic trade.
WCRX had a nice volume increase about an hour or so after WIND and ERES did. It peaked above some resistance I believe that turned into support and I got in at 19.01 It stayed steady for the most part for about an hour almost. The market had a wide spread sell off which caused WCRX to finally break its steadiness and dip a little down. I got stopped out at 18.90
As I'm writing this it seems to be hovering around 18.87 and on very low volume. Could see a comeback after this dip now that the market seems to be rallying back up a tad bit.
Saw WIND when it was up around 100% of it's daily volume in the first 30 minutes of the opening. A very good sign. Pulled up the chart and waited for it to pullback to establish some support levels, which it did. However, I didn't pull the trigger on what I thought looked to be a good buy. I hesitated and missed the spike up again.
So I waited a little more and decided to take a relatively big risk and get in at 13.17 which at the time looked to be right under resistance, the opposite side I would normally buy on. My reasoning was the volume was now up about 150% and the buyers were greater than the sellers buy a huge number. So I got in wanting to ride a small wave up to about 13.30 Well my plan worked out but my target never got hit while the stock seemed to be stuttering to get up so I got out at 13.22 and at the moment of writing this looks to be close to the top of that small move.
The morning run looks to be over and I won't be surprised if today turns into a slow neutral day.
Looking at the SPY 15 year chart you can see that we're basically at the top. The highs we are at right now are back from the .com bubble back in 00/01. If you look closely you can see that we had a false breakout above those levels (red line) and pulled back immediately. It's ironic how we have a credit crisis right at the time of this top. Maybe this is what we'll be blaming the bear market on when we're actually in the middle of it. Leads me to believe that we might not have enough strength at the moment to really blast through these highs.
We have a lot of uncertainty and mild fear at the moment about the market. I think this will eventually turn into bigger fear and eventually full blown panic as we're watching the market decline more and more. I mean come on, this market seems to be held up buy 3 stocks, RIMM, GOOG, and AAPL. The market's been stuck at or around the same levels for about 2 weeks.
I think waiting for more fundamentals to come out is crap. We're putting up false hopes that the market will get better if we just wait one more day to see what it does. Well, I'm gonna be bold and come out and say I think we're in the early stages of a possible bear market.
Traded PRGO a little late in the day and late in the rally. I was watching it move all day as I was in CPHD and ERES, lol. Saw it pullback a little and got in at the perfect time. Which was interesting because I felt really uncomfortable doing the trade but I also felt really confident. Something I didn't feel during those other 2 trades. In fact, I felt like I made a mistake right when I bought CPHD but I held on anyway to give it a chance.
I had a target of 29.20 when I got in at 28.91 with a stop at 28.60 PRGO hit my target of 29.20 but I never pulled the trigger. I got that thought in my head again that, oh it'll go higher. Well, it didn't basically peaked and fell again. I had my finger on the trigger as I was watching it come back down and sold on reaction when it hit 28.99
I'm not too worried about selling immediately when I get to a loss on a stock. That part I can handle but I need to focus more on selling when it hits my target. I think I might start using sell orders when it hits my price target and keep using my mental stop losses until I can sell immediately when it hits my target instead of waiting around for it to go higher and then holding it as it comes back down.
Traded ERES right after CPHD. It was a bad trade. I tried catching the wave and basically got in on the top. I sold out before it hit my stop though. Got in at 9.63 and got out at 9.39 and my stop was at 9.10... Bad trade.
Unfortunately, I decided to go long just before this wide spread sell off started, haha. Everything looked good, right when I got in on CPHD at 25 everything started to fall, I was a little annoyed. I got stopped out at 24 and it looks to be hovering around it for now. I wouldn't be surprised if it starts to rally right now lol. Isn't that how it usually works? Get stopped out just before a rally? Oh well, I should of put my stop at a better spot.
Thought I'd go short again. I missed the quick morning sell off and for some reason thought it would be a good idea to get in on it after the fact. I got in on QID which is a QQQQ Short Fund at 34.56 which was higher than what I wanted. I initially wanted to get in at 34.50 I just sold right now at 34.44 because I didn't like the way it was acting. It was jumpy and neutral and the volume was low. It was showing a lot of small bodies with big wicks, something I don't like seeing a lot of one after another. So, I decided to get out and clear my head.
