Went Short During Cut

I went short by buying the SDS Short Fund about 2 hours before the announcement. I had a feeling they wouldn't cut because I didn't want them to cater to market expectations. But, they did cut rates on par with what the market was expecting and everything sold off. Which doesn't quite surprise me as we already had the "cut rate rally" before the announcement so now that we know the fed did what we wanted, the rally isn't there anymore. Expectations have been met.

 

Anyway, I got in at 49.92 I told a couple people I was going short and everyone laughed at me so I knew I was doing the right thing. I sold out at 50.44 and SDS continues to climb as I'm writing this. Just under 50.80. It's really volatile though huge jumps and then comes back down. But I'm happy with my decision.

 

DSX Quick Trade

I got in on DSX a little too early. I didn't plot out the resistance and got in just under it. When I bought it is when I decided to draw the resistance lol, which is the top red line on the chart. Then it made sense as to why it was struggling to break those levels. Had a quick dip which is when I should of gotten in as it bounced off support but what's done is done.

 

it advanced up to a peak of 63 which was my target but once I saw it hit that level, I'm like, "oh, it'll keep going" Wrong, it dipped again and seem to struggle at the resistance line again so I dropped my target to 42.90 which was the new top of the down trend line. I wasn't going to miss this again so I put in a limit order to bail out at 42.90. It hit my point and I got out.

 

Since then, DSX seems to have pulled back slightly, it could keep going higher but I don't know if it has the strength to break 43 and keep going. I mean, it's already up about 8% which doesn't mean that much but considering the environment I think that's a substantial gain and profit taking could be happening later today but I don't know.

 

Couple Scalp Trades

Went short this morning by buying SDS at 50.36 and got out before the market started reversing again at 50.43 Very small trade like the last few I've made.  I feel really really confident making these scalp trades.

 

I feel my risk is a lot lower compared to holding a stock overnight, or weeks or months. Plus I lower my risk even more by accounting for the volatility in the stock and adjusting my position size accordingly. So my risk is very very low compared to my reward. This fits in with my personality as I'm a relatively impatient person but I've developed the patience to wait for opportunities now.

 

The volatility right now in the markets make what I'm doing fairly easy in my opinion. I just ride the waves up and down, trying to make a little cash in a sideways environment.

 

 

I went long on SCON right after I went short. The market started turning and the stocks I have in my "hot seat" watch list were starting to turn tot he upside. I got in on SCON at that moment. Got in at 13.20 and got out at the top of the candle at 13.60 which seemed to be the high for that time and about 20 minutes after that.

 

 

I'm probably going to call it a day as I'm low on buying power and I can't keep buying the same stock over and over (SDS) even though I want to keep going short on these small dips. So, we'll see what happens. Maybe a rally will happen at the end of the day.

Got out of TWM, Finally

My little fiasco on Friday got me a little worried. I couldn't get out of stock due to some crappy over protection laws by SEC. Anyway, I got out of TWM this morning at 62.20, 20 cents above my initial stop loss point so I'm happy about that. This is the intra day chart for this morning so far. The chart for TWM on Friday should be a couple posts down under General Update.

 

General Update

I figured I'd post an update of everything going on in the last couple days instead of making a bunch of posts for each topic.

 

First order of business: I bought a second 20inch widescreen monitor. This one will be solely for keeping charts on. It'll hold about 6 charts, each one being a decent size. I'm excited about this. I bought it because I'm getting to the point where it's hard to manage a couple charts, all my watch lists (about 6 of them) and manage my orders on one 20 inch monitor. This new monitor will allow me to keep my watch lists and my charts separate. I can manage my orders and watch lists on my current monitor and the second monitor will be dedicated to at the most, 6 charts.

 

I ordered this off Newegg.com I love this place for computer stuff.

 

Second order of business: I'm going to be writing up a detailed business plan for trading. I have it in my head but I feel it'll be better in the long run if I transfer my thoughts into a hard copy. That way I can go back and review it without having to remember it and I can modify it as I develop as a professional trader.

 

I found two sources with information on how to go about creating a business plan specifically for active traders.

 Trading-Plan.com and Tradingwinner.com are the two sites I've printed out and I'll be going over both of them and jotting down my responses to these questions. I'll then elaborate more on each response and organize them into a well defined business plan that I'll keep and modify over time.

 

Third order of business: This I'm a little bummed about. Basically what happened is today I made my 3rd trade of TWM this week which happens to be a 5 day period. I didn't realize that at the time as I put in my buy order of TWM at 63.88 I put in my stop at 62 but I didn't double check to see if it actually went through and waiting in que. When the time came around for me when I thought it was a good time to sell, I canceled my stop order and put in a market order to sell. Well, I double checked this time around to see if it sold or not, and it never sold. Said I had insufficient resources. Now, I'm stuck with a losing position until probably Monday when I'll try and sell it again.

 

I'm not too worried about the loss though. I adjusted my position size accordingly to where I put my stop and since I'm getting over a losing streak I've cut my risk per trade in half. So, even though I'm in the red, the overall loss is very minimal. If TWM breaks 62 I'll start getting worried but it looks like it's been hovering around 63. So, the situation isn't as bad as it seems, financially anyway.

 

Green arrow was my entry early this morning when I thought it would be a good move to go short. Which it turned out to be good but a few minutes before 9:30 when I wanted to get out, I couldn't. So I was stuck watching TWM go all the way back down and now we're hovering around 63. Needless to say, I was pretty pissed.

 

Getting Rid of Covestor

You might have noticed that I deleted my Covestor Badge on the left which displayed my performance. I was up about 25% a couple months ago and now I'm down about 20%. The dip in performance was mainly me trying to figure out my methods. Unfortunately I had to use my capital to figure it out because I feel it's the best way. No one knows how they will react to something until the shit hits the fan. I've learned tremendously what works for me and what doesn't based on that.

 

Also, I can tell it's been screwing with my Ego. There's been a few times where I won't get out of a losing trade because I don't want it to hurt my performance trend line and I'll wait and wait and all I'm thinking about is Covestor and how I compare with other traders. I was thinking about this late last night before I went to bed. I noticed that Covestor added a new Ranking section so you can see how you fare against other traders. I saw all the people making 800% and it bummed me out. So, I won't be having that badge up here anymore. It's not about winning and losing money it's about making good or bad trades and I feel I've been making a lot of good trades even though they turned out to be losers because I traded my plan.

 

I need to focus on what I do, not what everyone else does and then compare myself to them. That's what I've been doing and it's messing up my ability to think objectively.

Tiny TWM Trade and the QQQQ Channel

Made a very small trade this morning, haha. Got in on TWM at 64.02 and got out at 64.39 As I'm writing this TWM seem so be rallying up higher than my exit point. Which is cool, I'm glad there's people out there making money. In retrospect, yeah, I should of held on but I'm happy with what I did.

 

Basically rode a wave down in the channel that the market is in. Buy low sell high. It's kind of easy now considering we haven't broken the high or low channel lines for a couple weeks now.

 

Below is an intra day chart of the QQQQ's. It's in 3 minute increments over a 10 day period I believe. We can see by the red and green lines that we're stuck in this tight channel. Buy low sell High would apply at this moment for active traders. Investors, I don't know, I don't know how to invest so I don't know what to tell you, haha.

 

 

Below is a chart of my TWM trade, my tiny, TWM trade, haha. Entry and exit points are in green and red arrows.

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.