If You Think You Can

If you think you are beaten, you are

If you think you dare not, you don't

If you like to win, but think you can't

It is almost certain you won't

 

For out in the world we find,

Success begins with a fellows will,

It's all in a state of mind

 

If you think you are outclassed, you are

You've got to think high to rise

You've got to be sure of yourself,

before you ever win a prize

Life's battles don't always go,

to the stronger or faster man,

 

But soon or late the man who wins

IS THE MAN WHO THINKS HE CAN

I have this poem taped up on the side of my monitor and I read it when I feel down and bummed out. It puts perspective back into my vision. Unfortunately, I don't know who it's by. I found it in a book I read a long time ago.

Brilliant Hope

Dreams will never fade

And our destiny is never truly made

And even when the nigh is brisk with frost

There is no reason to ever be afraid

Because trust can never be lost

Never give up...if all seems gone

...And see that which we truly love

Forever stand tall and strong...

Real truth comes from within our hearts

Knowing our passions can never fall apart

We quietly reflect on all time

Wishing for everything to unwind

It's true...life can change on a dime

And when we least expect to touch the sky

We do so in the blink of an eye

The ship of self can float adrift

Can the fate of this man ever shift?

Drifting from shore with broken rope

The whole of soul feels lost and missed

But in the end, there's only brilliant hope.

 

By Joppa JaMocha

Seven Mistakes All Novice Traders Make and How to Correct Them

MISTAKE ONE

Lack of Knowledge and No Plan

It amazes us that some people expect to trade the stock market successfully without any effort. Yet if they want to take up golf, for example, they will happily take some lessons or at least read a book before heading out onto the course.

The stock market is not the place for the ill informed. But learning what you need is straightforward - you just need someone to show you the way.

The opposite extreme of this is those traders who spend their life looking for the Holy Grail of trading! Been there, done that!

The truth is, there is no Holy Grail. But the good news is that you don't need it. 

 

MISTAKE TWO

Unrealistic Expectations

Many novice traders expect to make a billion dollars by next Thursday. Or they start to write out their resignation letter before they have even placed their first trade!

Now, don't get us wrong. The stock market can be a great way to replace your current income and for creating wealth but it does require time. Not a lot, but some.

So don't tell your boss where to put his job, just yet!

Other beginners think that trading can be 100% accurate all the time. Of course this is unrealistic. But the best thing is that with some methods you only need to get 50-60% of your trades "right" to be successful and highly profitable.

 

MISTAKE THREE

Listening to Others

When traders first start out they often feel like they know nothing and that everyone else has the answers. So they listen to all the news reports and so called "experts" and get totally confused.

And they take "tips" from their buddy, who got it from some cab driver…

 

MISTAKE FOUR

Getting in the Way

By this we mean letting your ego or your emotions get in the way of doing what you know you need to do.

When you first start to trade it is very difficult to control your emotions. Fear and greed can be overwhelming. Lack of discipline; lack of patience and over confidence are just some of the other problems that we all face.

It is critical you understand how to control this side of trading. There is also one other key that almost no one seems to talk about. But more on this another time!

 

MISTAKE FIVE

Poor Money Management

It never ceases to amaze us how many traders don't understand the critical nature of money management and the related area of risk management.

This is a critical aspect of trading. If you don't get this right you not only won't be successful, you won't survive!

Fortunately, it is not complex to address and the simple steps we can show you will ensure that you don't "blow up" and that you get to keep your profits.

 

MISTAKE SIX

Only Trading Market in One Direction

Most new traders only learn how to trade a rising market. And very few traders know really good strategies for trading in a falling market.

If you don't learn to trade "both" sides of the market, you are drastically limiting the number of trades you can take. And this limits the amount of money you can make.

 

MISTAKE SEVEN

Overtrading

Most traders new to trading feel they have to be in the market all the time to make any real money. And they see trading opportunities when they're not even there (we've been there too).

Trade Well and the $$ Will Flow!

Thanks to stockmarketgenie.com

IDMI- Great Way to End the Week

To tell you the truth I was not going to trade this and was not expecting trading at all. But something about IDMI drew me to it and I got up this morning to see how it was. First candle it fell then the next one brought on the buyers and it took off.

I jumped in at 2.40 which for a couple minutes thought I pulled another dumb trade because it fell to around 2.28. Next candle started inching its' way back to 2.40 and once it did it shot right by.

I unloaded some at 2.50 and I let it run until I saw the gap between the bottom of the current candle and my seven EMA. I saw the gap and sold the rest at 2.58

Somewhat pleased. I do not want to get too excited but I am happy I finished this horrible week on a good note. Even if I did not end the week profitable, the damage is a little less dramatic.

Two Kinds of Fear

There's one root emotion that drives the market with two outcomes. It's either Fear of losing money, or Fear of missing out on money. Now, greed, one might say, is an emotion that drives the market as well, which it is. But at the root of Greed, lies Fear.

 

During my first few months as a new trader, I developed an extreme fear of losing money. That idea is what's kept me in the game so long, especially as a new trader. I'd always cut my losses immediately because I didn't like losing money. Doing that has prevented huge losses and at the same time it's also prevented me from being in a stock that rebounded.

 

I started following a strategy that I believed in and at the same time had the patience to follow that strategy. Once I became consistently profitable, I started developing a fear of missing out on money. At that point, I lost respect for the market and it let me know.

 

Having the patience and discipline to follow a specific pattern that you trade is one step needed. But the kind of fear you have determines where you go. Having a healthy fear of the market is natural and should not be lost in your mind. When I started becoming very profitable in Jan and started losing my fear of the market, I got my bottom handed to me twice.

 

I feel I've developed the discipline to trade highly favorable trades but at the same time I need to regain my fear of the markets. I need to know that the market is the boss and if I lose respect for the market I'll fall apart. Regaining my fear of losing money is what I need to get back.

 

Combining a healthy fear of the market with the discipline and patience to trade your game plan I think is the next step for me to take and is also a winning combination of long term success. I'll probably miss out on a lot of money that I could of made by getting out a little early, but the idea of trying to extract every cent out of a stock, every time you trade, is very unlikely. I'm not here to pick tops and bottoms. I want the bulk of the move and be happy.

Never Give Up

Completely randomly I came across a web site run now through stumble upon. The site has a compiled list of famous quotes from people throughout history about their views on quitting.

 

Lincoln, Einstein, Ford and many more. I read them all and it's given me a bit of hope to keep on keeping on.

 

• "Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better."
  ~ Samuel Beckett
• "Our greatest glory is not in never falling but in rising every time we fall."
  ~ Confucius
• "Only those who dare to fail greatly can achieve greatly."
  ~ Robert F. Kennedy

 

Full list here: http://www.des.emory.edu/mfp/efficacynotgiveup.html

SPAB- Jan Gains Gone

*sigh* I don't know if I can really do this. I just lost all my Jan gains in 2 days. I know what my problem was, way too big of a position size.

 

SPAB opened at 1.90 and I jumped in at 2.00 The bid and ask were pretty damn wide and so the offer hit 2.24 and I had more in my account to cover my last 2 days losses and then some. But, that all quickly went away and it made since because the daily pivot point was right at 2.25 It hit the price twice and basically fell.

 

Freakin' market orders...I put in limit orders on the way down but nothing was getting filled so I said screw it and started putting in market orders and got filled at absolute horrible prices. On top of that I kept getting partial fills so I was charged a huge amount of commission just to get out.

 

I'm at a point where I feel like saying fuck it and just getting some job to work at for the rest of my life.

 

Well.. it's not that bad I guess. I'm still technically up 2% for the year so it's not like I blew out my account or anything. But all that work I put into Jan and now it's completely gone. My self control got tested, twice, and I failed both tests. I guess this is why I'm still a rookie.

 

CTUM- I think I'm going to cry

Where do I begin. I picked CTUM last night for a possible run in the AM. It moved extremely slowly so I moved on and decided not to trade it.

 

I come back later and it's up 22% I buy some shares at 1.50 when I see it spike. Well, It falls all the way down and what do I do? I get out at the bottom and sell all my shares at 1.63 I lost a gigantic amount of money on this trade. I don't know. I'm pissed but more in shock right now.

 

I'm starting to fall apart a little emotionally. I was up 12% for Jan as a whole and now my account is down to 8% as a whole. Biggest loss of my life.

 

For some reason I don't feel too worried, maybe it's denial or maybe it's because I know I can get it back. I just need to take some time and get my head on straight.

 

Thoughts on Exit Strategy

I was very quick to sell earlier out of VSCI. Again, in retrospect it was a beautiful winner. I bailed early because I saw the gap between my EMA and the price. I shouldn't be too quick to get out.

 

What that should of told me was, "hey, pay attention now because it might be time to sell". Instead, it was more like "oh crap, get out right now!"

 

Because of my impulse reaction to get out immediately, I gave up a loss that was higher than what my average loss is -plus I left a lot of money on the table. I've been doing fairly well with my discipline in regards to staying away from non performing stocks.

 

Whether I should give a little more leeway with the stocks I trade when they decline a little is something I'm debating. If I do come across a loser that keeps falling, I don't want to be stuck holding the hot potato.

 

I like my exit strategy but I think it would be a lot more effective in executing when the price has had a relatively long run instead of executing the strategy when it presents itself right after I get in.

 

We can also look at my entry. Was my entry really a good place to get in? I probably could of waited another candle or so to see how it unfolds but at the time I liked what it was doing. Saw an opportunity and took it. Unfortunately, my short term exit strategy isn't quite defined. What do I do when I enter a stock and it declines after I get in? At the time I thought it was wise to admit defeat and get out.

 

I don't know if I'm subconsciously trying to justify my mistake or if there is something I can really do to better myself in the future. I know I can't add every little detail from every trade to make the ultimate strategy which is something I seem to be doing.

 

This was one of those trades that got me by the balls and I didn't know how to handle it. I bailed in fear of losing more capital which I thought was a wise move. I need to protect my capital with everything I can because without it I can't trade.

 

In the end, I think what I need to do is just be aware when my exit strategy does present itself right after I get in. Don't be so quick to get out but be on the ball in case I do need to get out. At the same time, after I've had a nice run and my exit strategy does present itself after a profit has been accumulated, a wise move would be to exit. Exit based on my strategy with a profit.

 

After Thoughts:

My strategy isn't fool proof. It's not perfect and that's something I need to grasp. There will be times when I execute everything flawlessly and I don't come out on top. It's the nature of the beast.

 

I know I'll come out on top in the end. My discipline is what's keeping my profitable and I feel I've been honing in on those skills this year. We'll see what the market brings for tomorrow.

Thanks for subscribing to my feed!

VSCI- Hit a Snag

Only stock that started to move nicely in my watch list. Retrospect it looks like I got in pretty close to the end of the upward move with an entry of 3.75

 

Next candle had me a bit worried because there was a lot of volume coming up but the stock wasn't making any new highs. It stopped dead in it's tracks at 3.75 and didn't want to budge anymore. The 3rd candle is when I decided to get out. Reason being is because what it showed me is my exit strategy. My exit strategy is when the bottom of the most recent candle starts to run away from my 7 EMA tells me it's a good time to get out. I decided to get out at 3.65

 

The gap between the bottom of the candle and the moving average seems to create a vacuum and the price want's to fall back down to fill that gap (touch the EMA) before it'll take off again, or fall lower.

 

I didn't think twice about selling when my exit strategy was shown to me. I felt extremely calm when I sold even though I took a bigger loss than average. Looking back at the chart it seems to be slightly rebounding off that EMA. Seems fairly obvious now the volume was extremely light on the selling part of the chart and volume is heavily picking up on the buying side. What's done is done.

 

Trade Log Spreadsheet

My spreadsheet that I've personally developed and use on a daily basis. I thought it might help some people out considering how many people have downloaded my Calculator and my Success Notes.

The Basics:

• Win/Loss Percentage
• Average Gain/Loss in Dollar amounts and Percentage amounts
• Profit Per Share
• Percentage Gain/Loss of account as a whole
• Net profit
• And a lot more

Advanced Analysis:

• R Multiple for each trade
• Expectancy
• Profit Factor
• Equity Curve Chart
• Potential Profit per trade
• Potential Percentage gain per X amount of days (you can specify the time period)

I've spent a huge amount of time coming up with formulas to calculate this data. I'm constantly going over my stats to see where I'm at, where I'd like to be, what I need to do to get there based on how I'm performing, etc.

The boxes in Orange represent data fields that can be altered/entered in by the user. Everything else is automatically calculated and doesn't need to be touched. If you need any help with certain fields or don't know what a box means, leave me a comment and I'll help you out. The data that is currently in the spreadsheet is data I've made up as an example.

Help Files for the Spreadsheet: http://www.mediafire.com/?zny3wltgyli

Download here: http://www.mediafire.com/?71gec97eytm

I hope you enjoy my spreadsheet. I find a lot of joy and feel good when I share what I've created with people. Happy trading.

Thanks for subscribing to my feed!

NSR- Nice Bounce

Saw NSR last night when it was down 25% or so during the day. Read a couple article headlines basically saying it was an over reaction on the sellers part. I put it in my watch list and wanted to see if I could get a bounce in the morning, and I did.

 

Retrospect, I did hesitate to get in. I let it move without me because a Pivot Point was approaching and I didn't know if it'd reverse at that price especially with the way the market is now or if it'd blow by. It did blow by and at at that point I put in my order and got filled at a price of 22.53

 

I let it keep running because the offer kept rising and the bid would soon follow. Even though it did fall back a little bit the offer immediately kept jumping. Then we hit resistance which we rocketed by. I was too slow to sell some shares so I didn't and finally sold all of them at 23.10

 

Man, just looked at the chart right now. It's up around 23.60 Left a lot on the table, something I seem to do a lot. There's wasn't really any reason to sell. I should wait until I see a blue candle develop before I get out. What I did was buy strong and sell even stronger with no weakness in sight. I should probably wait until some real weakness develops.

 

Either way, I'm happy with the gain.

Sidelines- Off Topic (Drawings)

Not putting on any trades today. Markets seem to be either stalling or failing.

 

I've been looking at a lot of art recently mostly on www.deviantart.com (love that site) and decided to put some of my drawings on my blog. Spice things up a little bit.

 

I usually draw on days like this one where I'm not active in the markets and/or I put on a losing trade, lol. It's a good tension releaser I use along with going on a nice jog around my neighborhood sometimes.

 

 

 

 

 

 

 

 

(my sis, haha)

 

This one was done with a regular #2 pencil, lots of rubbing, and one of those rubber eraser things. The rest were done with the same techniques except I used a B4 pencil only. I don't really know how to integrate different kinds of light and dark grade pencils into a drawing so I just use one and make it work.

IDMI- Easy Money

Man, this kind of trade probably won't happen again for a while. Once I sold out on my first trade with IDMI I had to put on another position when I saw the stock was up 130% from when I bailed out. I got in again at 2.65 and let it ride until 2.95

 

I think I made around 9 or 10% on this second trade but my position size was 1/4 of what the first one was. The profit was 2.5 times my first one so this was an efficient use of capital, lol.

 

The gap on the chart was when I closed the chart and took it out of my watch list. I added it back in to see what IDMI was doing and that's when I saw the huge jump and got in right away.

 

IDMI Late Trade

Wasn't planning on trading but I was watching IDMI for a couple hours and finally decided, screw it, I'm going trade this. Got in at 2.05 ran up after I got in which is always a good sign. Sold some at 2.11 Fell back down and started making lower highs but higher lows. I don't like those kind of patterns. I sold the rest at 2.08 Not a big gain or anything but good enough for a 30 second trade.

 

Sidelines- Once Again

Markets are horrible for long positions. I woke up 15 minutes before the opening bell and the ISM data somehow got leaked and the Dow fell hard along with the other indexes. I saw one stock I liked last night and it performed badly to no surprise.

 

Not much else going on for me. I'll see what the market brings after hours today.

Sidelines- Being Patient

Had a few stocks I was watching this morning looking to see if I could get a morning pop out of any of them. None of them performed and they all were in free fall mode along with the market as a whole.

 

Q's SPY and IWM are all falling still as I'm writing this. Looks like I'll be sitting out. I'm not too surprised because the TRIN closed Friday at 0.72 I believe. I need a number more around 2 or 3. I was looking forward to APWR but it fell right away. So, I'll have to sit this one out and see what the market brings me after hours today to pick through.

 

 

Quote of the Day:
Behavior is a mirror in which every one displays his own image.
--Johann Wolfgang Von Goethe

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January Performance Stats

I'll just post some quick stats for how I fared for the month of January.

 

Total Trades: 11

Profitable Trades: 7

Win Probability: 63%

Average W/L Profit Ratio: 1.57

Average % Gain per trade: 7.24%

Average % Loss per trade: 3.07%

Average % Gain of Total Capital per trade: 1.68%

Average % Loss of Total Capital per trade: 1.74%

 

Total Gain for January: 11.46%

 

When I take a loss it seems that my entire account takes a slightly bigger hit than what my winners can make. I need to be a lot more aware about cutting my losses and get that percentage down. Ideally, I'd like my average loss of my entire account to be more around 1% not 1.7%

 

My frequency of winners seems to be what's keeping me afloat. For the month of February not trading loser stocks and sticking to the high probability winners is going to be the key theme.

 

I was a little hesitant about posting these stats because I don't want these numbers to get to my head and think I can keep pulling these numbers without trying. I'll have to buckle down even more, be more disciplined, focus on my goals and stay on the ball when it comes to objectively identifying my setups. I posted these stats so I can have a digital copy of my performance so I can come back in and track my progress.

Thanks for subscribing to my feed!

Sidelines- No Action

Quote of the Day:
Discovery consists of seeing what everybody has seen and thinking what nobody has thought.
--Albert Szent–Gyorgyi de Nagyraolt

None of my watch list stocks did anything I thought would be great for a trade. CHCI shot up huge on the first candle, I think 20% or so and then died. Couldn't maintain those levels and seems to be stuck at 1.20 and now falling.

 

TARR touched 1.53 and fell like a rock. I quickly got rid of that one and moved to EXPO. Which was the only one making higher lows, but it out of all those candles moving, it only had a 2% rise. Potential gain was not even close to how much I was going to put on the line. I bailed on this one also.

 

Unfortunately, nothing worked out for me on these trades. However, I've been profitable every week so far of Jan. and up very nicely for the month. I need to maintain this discipline next week and for the month of February. One week at a time.

 

Patience. Don't lose money. We're here to make it, not lose it.