Sold AMZN

Just sold AMZN a few minutes ago. I wanted to hold it over night but the stock showed a change of plans. I got out at 88.20. It started acting weird, bid and ask started getting jumpy, momentum seemed to slow down, the QQQQ's looked to be reversing as well as volume picking up for them. TWM started gaining on good volume. Seemed like a good decision at the time. It'll probably rally more but whatever, it was a good trade and I'm happy with my roughly 4% gain.

 

I missed the sell off this morning. I wanted to go short but I missed my entry and so I kind of waited around and watched everything go down. Then we flattened out and seemed to form a double bottom and I knew we'd rally again. I mean, everyone over reacted so hard to the news that came out and it just made sense that we'd bounce back at the end of the day. AMZN seemed like a good candidate to ride the bounce back.

 

Bought AMZN

Got in on AMZN a few minutes ago. Entry was 85.04 I bought it because I think today is just another over reaction to news. AMZN had extremely good earnings but the stock fell because it wasn't up to par with AAPL and GOOG. Which is pure crap. People are expecting way too much and over react way too much.

 

There's support around the 85 level also some around 84. Stop is at 82.50 and I plan on selling tomorrow on the rebound.

 

Goose Egg Today

Not much happened today. Market rallied and then went stale for most part of the day and then rallied a little before the close. I had about 8 setups I liked for the day but none of them hit my lows since we were so neutral. I didn't force any trades today which I'm happy about. One step closer to overcoming my impatience problem which in the end should save me some money from making stupid trades.

 

When I start feeling excited and want to make trades I think about the stocks I looked over the night before and all the work I put into the setups I picked out and I feel more relaxed and confident. I feel better knowing that I have setups I've picked out myself and I have confidence in my abilities so I wait for them to happen. If they don't happen then all the better. I'll end the day with a Goose Egg but it's better then red numbers. So, that's something I'm working on.

 

I notice that I make better decisions when I lean back in my chair with my arms crossed rather than leaning forward toward the screen with my hand on the mouse. The TWM trade for example is a perfect trade in my opinion and I did it completely objective and I feel I can be that way when I'm patient and relaxed about the market. When I see stocks shooting up huge amounts I'll get excited and try and get in on them but I know that I already have setups waiting for me and when the alerts go off I've got my own set of opportunities to look for.

Sold TWM- Break Even

I basically liquidated my portfolio this morning. I noticed that CHNG and WIND kept falling and falling right at the open like a lot of stocks and I didn't know why they weren't being sold (stop orders). I go to my orders section to double check what prices I set for them and my orders aren't in even que! I put in Day Orders and not GTC. I was so pissed so I sold both CHNG and WIND because I didn't want to lose any more money than necessary.

 

I then put my focus on what I had left, TWM. It's a short fund. Since I can't officially short stocks I buy short funds to make it work. I was more patient with this one. I sat back and watched the action. I compared TWM with the QQQQ's, watched the volatility index, watched all the market indexes, watched the other short funds. I sold because all the market indexes were basically just under break even point, volatility made a new high but quickly cut itself in half, volume was picking up on the QQQQ's so I got out of TWM at 67.54 roughly a 4% gain. But the gain I had on TWM basically offset the losses I had on CHNG and WIND. Back to square one.

 

Green arrow shows my entry on Friday and Red arrow shows when I got out early this morning.

 

Bought TWM

I turned on CNBC this morning to see what was going on and why the market is down big. First thing I heard was talk about a recession. I immediately came over to my PC and put in an order to buy TWM. It's an Ultra Short Fund I've been following and wanted to buy it a few days ago because I had a feeling something like this might happened but I never bought it. Well, today gave me an obvious good reason to get in. Basically playing on the fear of the market and also hedging out my portfolio.

 

The arrow shows my point of entry. Got in at 64.78 with a stop at 62.50 which I might raise on Monday and buy more shares, depending on how things play out. If we rally to the upside it's showing we're in a strong situation but if it continues to decline the overall public could be losing confidence in the situation. It'll be interesting to see how things play out.

 

Sold USU

This was my last position on my old style of trading. Wasn't working out anyway. Sold at 8.75

 

Bought CHNG

This isn't quite up to par on my rules for picking stocks but I've always liked CHNG. When I saw it down around 11 bucks it looked like a good longer term position. So I got in at a decent level. I'll keep this in the corner of my portfolio for the next couple weeks.

 

I got in at 11.60 stop is at 10.50 just because of the crazy volatility but I'll raise in time to slowly lock in profits while adding shares, if it plays out right.

 

Sold LOCM

Got out of LOCM. It was part of my weird ass style and I've changed my ways so I wanted to get rid of it. Plus it was acting weird. Exit price was 6.75

 

 

 

Bought WIND

I started changing things up a bit as far as how I go about getting into stocks. I noticed that I had a plan for selecting them, but I didn't quite know when to get in. I guess I'd just kind of wing it. Also with my horrible stop loss methods I get screwed up a lot. That's all changed now.

 

I've got a somewhat general plan on picking stocks but still detailed enough to weed out the crap. My entry point is a little more defined based on what I think is a good method to use. Coupled that with my methods of managing risk things should be turning around, but we'll see what happens.

 

Anyway, back to why I started this post. I got in on WIND at 11.88 and stop is at 11.55 The overall trend of WIND is up, EMA's are looking good and volume is relative to the price action. I set an alert to go off if it a decent support level. It hit that level and watched to see it confirm these levels once again, it confirmed, so I got in. It was also going up while the QQQ's are falling, which is always good to see.

 

Still working on my patience/over trading problem. I feel I need to be in the markets all the time but what I need to do is find a plan that I'm confident in and wait for the setups that I've created and buy it. If I do that enough I'll start gaining more and more confidence in my abilities and I won't want to keep changing up my plan and I won't want to over trade as I have a sound system to work with.

 

Bought USU

I went over a lot of charts last night and I don't remember why but I wrote down USU's 6 month chart as something I liked. It's a pretty bad chart and I don't know why I would of saved it to look back on but I did. I set alerts for the intra day chart. They went off and I started looking at USU. I got in on the ride up to the resistance line and it pulled back and now it looks to have broken that resistance.

 

I got in at 6.87 and my stop is at 6.65 I noticed already that my new risk management method is going to help a lot in preventing weak stop outs. I've tailored both of these picks around a stop loss point and have adjusted my position size accordingly. I can tell on LOCM I would of been stopped out because I know I would of put a really tight stop under that support line. But I didn't I put it below the action which has kept me in for the time being. Although I don't know if now would be a good time to be actively trading the markets right now.

 

8.90 looks to be the new resistance line. Also, I'm still long LOCM

 

Bought LOCM

Got in on LOCM. I like how it was up pre market and it tested a support level 5 times. I had to get in. Got in at 6.87 with a stop at 6.60 that's in a good stop below the action. That's a 4% decline roughly and I've adjusted my position size accordingly. I'm leveraging the best amount of cash for this particular situation. Green is the support line, black is my stop, purple is more support that I havn't colored yet, haha and the red line at top is resistance.

 

Risk Management- Revised

I made a post I think about a week ago about risk management and the formula that I like to use. I've been thinking about my trades and I've noticed that I get stopped out on almost every single one. Now, a lot of those stops have saved me from losing even more money but they've also cost me a lot of potential money. For example, getting stopped out just before the stock rallies which has happened to me quite a bit lately.

 

So, what I'm going to do is very simple. Keep my current formula, but set the stop at a point that's out of the way of the action but not so far away where to the point of it being pointless to trade. A point that clearly confirms and tells me, "hey, this trade is definitely wrong" instead of "hey, this trade could be wrong".

 

That point will be based on my current trading methods of using Support/Resistance levels on a Daily chart and incorporating them onto an Intra day. I'll see what the action is like on both charts and pin point a stop loss target that I think confirms that the trade is officially wrong. Depending on how far that stop is from the current price, I'll adjust my position size accordingly to my max risk per trade. If the stop is far away, I'll put on a smaller position, if it's closer to the current price, I'll put on a larger size relative to my risk. Basically it's what I've been doing now but really focusing on what a good stop point is instead of a generic automated stop I use for every single trade.

 

I feel this will help weed out those false stops in which I get stopped before a rally but still keep me relatively safe from potential disaster. Now that I have the plan and what to do, I need to put it into action so it becomes habit.

Traded CPSL

I originally saw CPSL a 9.50 and went to put in an order but I got distracted by someone and then I had problems putting in the order with my broker and by the time I was about to submit the order I missed the first move. Then it broke resistance and it I missed the second move and thought I'd get in even though it could of been too late.

 

I tested the waters with a small amount of shares and increased the amount as it started showing me a profit. It stalled out at the top because some news came out about CPSL reporting a 1% loss in revenue, I think. At that same exact time, the stock basically started stalling out and slowly coming back down. Established new levels and it couldn't break 1.90 so I got out.

 

I feel really good about this trade, even though I lost some cash. I was extremely objective. I could totally tell a difference on how I was acting compared to my last trades. It felt good when I sold the shares. I had this weird, calm, confident, good feeling.

 

Yellow boxes on the left are my entry points as I kept buying on the rise and sold on the right yellow box. Looks like I caught it on it's last legs up.

 

Still working on my impatience problem. But I'll get there.

 

Stopped out of AAPL/Mental Stops

Stopped out of aapl earlier this morning. What I'm going to do from now on is still use a stop but I'm going to make it a mental stop. I'll draw out my stop and see it reacts to it. If it keeps falling then I'll sell but if it seems to stall out like it did here then I'll hold. There's been a lot of times I shouldn't of been stopped out but I did. CHNG for example, bought it at the dip on everything tanked and immediately got stopped and it rallied big time the next couple days. If I just kept that mental stop and watched it closely, I wouldn't of sold.

 

Not much else to say. Rallied in the morning real quick and fell and then stalled out. Stuck in another channel like Friday. Upper and Lower tredlines are starting to come to a point. Could see some serious action this week.

 

Bought AAPL

Wasn't planning on doing much today. Kept an eye on AAPL and saw it's been trading in pretty tightly in this channel and I wanted to see if it could break 167. I did once but the volume wasn't to my liking and it fell. About 10 minutes before the close today it broke above 167 on huge amounts of volume and I just had to buy it.

 

Got in at 167.10. My stop will be around 162 But I'll keep this in my portfolio for about a week to let it grow.

 

Perfect Setup

Ok, this is what I'm looking for. It's a great setup of what I planned on doing yesterday.

 

1) Stock was up pre market

2) Support confirmed by the 3rd tick from the open on huge amounts of volume

3) Stock rallies to resistance and falls back on pre established support level

4) Stock rallies off support and breaks through resistance on huge amounts of volume and settles on top of resistance and makes it support

5) Market conditions were solid. Great economic news came out and volatility was down 5% from yesterdays huge sell off.

 

 

 

This second chart below is LDK. I paper traded this roughly a week ago and the setup is almost identical.

 

1) Stock was up pre market

2) Stock confirms pre-established support levels with huge amounts of volume at the open

3) Stock rallies and hit's established resistance and falls to confirm a new support level. Bearish and Bullish Candles bottomed out at the same levels

4) Rallies and breaks through resistance first level of resistance and hits second level and pullbacks.

5) Q's fell at open but rallied just before 7am PST

 

 

 

All I need to do now is have the patience to wait and wait for this setup to happen while ignoring all these stocks that rally around me. That's going to be the hard part.

Going Over Trades

I went over my trade book to see if I can spot a common error. I'm impatient. I've been buying stocks before the opportunities fully present themselves, I'm jumping the gun basically and it's been biting me in the ass.

 

I have the right idea, I just force the trade. I'm impatient. So, this is my plan to help combat that.

 

I'll be looking for stocks making pre market highs. When the market opens I'll let it do it's thing and wait for a pull back and buy once it's fully established new support levels or current ones. I'll only buy if the market is rallying in the morning to help boost my odds. If it's not then I'll wait for the market to rally and see if I can spot an entry. I'm not going to be buying stocks in bad market conditions anymore. It's not worth the risk.

 

 

Strong Points:

- I can buy without fear or fear of losing money

- I can buy without hesitation when I see a potential opportunity

- I predefine my risk before I enter a trade

- I'm constantly monitoring my emotional and psychological state while I'm trading

 

Weak points:

- I'm impatient

- I'll force a trade without viewing it objectively

- I over trade

 

I need to work on eliminating my weak points. I'll try and come up with some ideas on how to do that.

Yahoo Finance Downplaying Sell Off

I just saw that Yahoo Finance has changed their headline for the same story from "Wall Street Gives Back Gains" to "Stocks Retreat As Investors Book Profits" which makes it sound more bullish. I think we're in for a bad situation. Something I called back over a month ago (previous post). The time has come, and I think it's time to sit out unless your shorting the hell out of everything.

 

 

 

People aren't booking profits. Their getting the hell out to save what tiny bit of profits they have. AMZN has erased over 2 weeks of profits in about 30 minutes.

Taking a Break

I need a break. The current pace I'm going now I'm going to go broke by the end of the year. I've got to stop trading in my bad market conditions. I don't know when I'll be back to trade but I need to stop and take a breather for a while.

 

I've been making a lot of stupid trades. I need to stop and really see what I'm doing wrong.

Sold CWTR

Another fizzled out stock. Didn't like the way it was acting along with JDSU so I sold it before it got stopped out.  Sold at 10.98