I did not make any decisions this am and did not even catch the premarket futures at 6am- Got in this evening to find that my sole remaining position- FCG - a Nat Gas play gained 8% above it's close yesterday. about 6% above my entry- A real negative about leveraged trades- is understanding what they are tracking- As unsophisticated as i am as to how these things work- I naively expect that if a Nat Gas focused fund like FCG can base and rally, the larger Nat gas market should be doing likewise- UGAZ seems to be the 3x for UNG- Tracks comparatively the similar moves. FCG is not leveraged- but seems to be the more beneficial way to get in a bounce on the energy sector compared to UNG- I don't know if this holds true over the longer term- but with an energy rally underway today on oversold conditions- I'd rather see the type of move made in FCG over the past few days- than in UNG_ which may be based on spot price ? I find that i am not in touch with today's market rally- I see it on the charts after hours- and that all too symetrical Doji at 2 pm across diverse sectors- SSO, Cure- etc- Is this rally program trading or something with substance? I'll sleep on today's action and see if i can catch some indication in the am . My Bias is to the fear side - and i am skeptical - Trying to not sit placidly on the sidelines if a market rally ensues- but what is the driver?
Update- I have totally missed the big market rally this week- I lost computer access at home, got tied up with work- no computer access during the market hours- Only after 2 hours late this pm with the internet service provider- and then HP Tech support to re configure my internet drivers to allow access- for an additional fee- was i back on line- after the market closed for the week- The intent was to have been prepared to enter back in the Investment account- and to go long CURE and SSO. Instead of sniveling about the woulda=coulda- shoulda- Something can be learned from this-about preparation I didn't have a plan B- Losing access at the home is one issue- To have my laptop get corrupted at the same time - even during the work day- if forced, I can find my way to an active wi-fi- spot during lunch. I also didn't know the FED was going to speak or pass out positive guidance-Some days the work day runs long- and i get in well after hours, after news. Can't make excuses though- Missing the rally after having ample opportunity to reinvest when I had sold higher- supports the investment brokers thesis that market timers leave late and miss the rallies- I didn't leave the positions late-per se- but i failed to get back in when I would have- I lost the tactical advantage . Having things break down when unanticipated- is rare- but "normal" - When does something break when you expect it? True story about market excess- I remember one winter- Circa 2000 or so-Tech bubble- I had just started trading some with an online broker- but still had a fair amount of assets with a local broker- I had gone online on a momentum trade in the day in the trading account, and called my broker to also buy the same stock as it rocketed higher during the day. I didn't tell my broker anything about putting a stop-loss with the trade- Even my mother had a position in the stock, and i moved a trailing stop up for her during the day periodically adjusting higher- Near the end of the day, the stock hit $54, Mom stopped out at $48 and i kept my position open overnight expecting this to be the next big thing- One of the lead stories on CNBC that night was the little hyped up stock that had such a huge intraday move- and callers in were saying it was a fraud- I cringed- and immediately put a mkt sell order on my online account- but it was after hours and i could not contact my broker- The ice storm that night took out my power lines- I navigated the ice covered roads the next am and was sitting at my broker's office about 5 miles away hoping he would have power- He did, and when he arrived I told him how important it was he put in a market sell before the market opened. He did, and i was fortunate to actually get out with -perhaps- a small profit-as i recall- That combination of events is rare- will likely not be duplicated again in my lifetime- Internet bubble stock/ ice storm/ penny stock type of huge rise and huge decline within 24 hours. The learning experience should be that one should plan for the unexpected . Perhaps something worth considering? A trailing stop-loss attached to every trade- possibly with a limit ( in the event of a flash crash spike down) A flash crash might activate the stop as a market sell but the fill may be 20% below the stop - not ever expected. but it can happen.- and perhaps a trailing buy-stop to get a fill on a market reversal. For now, the missed opportunity has occurred- I felt very frustrated when I learned of the large market Rally this week following some FED talk- I should have known- I should have been prepared.....I shoulda- woulda- But, the simple reality is, I have not lost any monies- I simply did not get the greater profits i could have been positioned for. Going forward- I think it is important that I try to be informed-At least spend an hour in the pm to get a summary of what caused the day's events- what forces are at work. Understand what positions/sectors are moving in and out of favor- Because the larger market sets the overall tone- What does it mean for the sectors i am interested in? I'm still holding FCG- my only position in the gas industry- I don't know if anyone that might be reading this thread has a position in the energy area- but look at the very large disparity in the directional move of FCG vs UNG or UGAZ- FCG continues to gain while the latter gap down lower and decline. In the world of ETF's -or ETN's - different forces are at work. As one drills down, into narrowed sectors, it is likely worth while to understand how the performance actually compares against the sector . Choosing FCG long vs UNG was a technical decision- Oversold Energy industry- looking for an oversold bounce- In fairness, I have traded FCG in the past and felt that it traded better long vs UNG- There are likely sound reasons for that if one does the homework. I was willing to step into an energy trade because of the oversold condition- However- I could have chosen UNG as a Nat gas play instead of FCG- both refer to Nat gas. In this case, i made the better choice- Perhaps just by luck- UNG made the upturn ahead of FCG- but broke down, while FCG trended higher- It suggests to me that the 2 will come back towards one another in the near future- so- a raised stop is prudent. Present trade is an 11% gain in a few days- Sweet- wish I had done that across the entire portfolio- It was a minor 2/3 position- or about 10% of the port value- I will take a moment to give myself a bit of credit- I did time the initial shift of the market well, and took some quick short trades- which offset the declines in the values of the long positions. I think I would have been sitting pretty today had i gotten the opportunity to make the long entry- regardless of that missed opportunity- the account value is mostly cash within 1% of my recent high. Since i did not get much participation in the upside- but i had seen a 2-3% port value decline as the market turned- The short trades added a few % back. The same is not true in the investment account where i had no options to take short trades.... The goal in this thread is to pursue a strategy that uses TA to improve the net results within a specific Investment. As investors get further along in life- they may not seek to get market returns and Risk- of 20-30% . But, If one can apply TA to a "safe" investment- like a bond fund- and also manage to not simply hold through declines- but to sell and reposition for a greater gain- why not? I'm not very well structured to speak to the investment side- as I am mostly focused on the trading account - but the end goal has similarities- I made a decision this afternoon- while still on tech support and trying to upgrade Anti-virus software- that I was not going to concern myself with what had transpired the past few days- Damn- that feels good to be ab le to sit here tonight- at the end of the week, and to not be concerned about what i missed out on the past few days. I'm trying to acquire that skillset - and it is an acquired skill- that one can not just react to the immediate stimulus. Daily or hourly chart- Maybe- Maybe Not. When i started this thread, I thought IF- I COULD DEFINE MY TRADING APPROACH- I could just make this thing automatic- Do X & y ON b CROSS- BUY OR SELL- I realized i did not have a truly defined technical approach- so, I continue - to learn, to analyze, to discover- to try to retain my profits- to step up my game, to get more focused and to allow winning trades room , and cut those losers and kick them to the curb-. 2015 will be a challenge. Going shopping this weekend- Consumed with other demands- it is easy to lose sight of what is important in one's life- One's life should not be determined by external demands. If you- the reader here- have not done so- go shopping friend! Someone will appreciate it and that counts more than anything found on these threads!
Fine and true sentiment in the last paragraph. I have similar interests in etfs. I cant keep up with individual stocks but i may "borrow" a pick or two from this journal if you dont mind. Low stress, longer terrm trades is my goal for the year. I am going to order riskarb007's book who posts here.....Gary Smith. Similar style i thing to Market Wizards Gil Blake and Randy Mckay(sp). Keep up the journal.
I have had a 3 day Internet outage and a week without my old PC when it failed, so I now have these options; 2 internet connections by 2 ISPs who do not share networks including cabling to the home. 2 PCs, but the old one is pretty ancient so think of it as possible disaster insurance only. My broker (IB) has a decent app so my iPad has been used to close positions. An iPhone which I can tether to my PC so that I have 3G internet access. iPad and iPhone were not bought specifically for this, I'm not that paranoid, but they do provide useful options.
You are certainly welcome to use anything presented here-if you so choose- Essentially everything I present here is borrowed/adopted/assimilated from other sources-including from those that share here on ET- and not particularly unique to me. I'll check out Riskarb007- What is unique is that each one of us has our own method and comfort zone- Got to challenge the comfort zone if we expect to get different results from past results. I'll be wrong, I'll make mistakes- Possibly fail to execute to my advantage- where someone else can succeed similarly. I intend to share both successes and failures- For me, the transition into ETF's as my primary focus came about over several years; there are a lot of reasons why - as you said- less stress for one. Eliminate that single stock Risk- Of course, you don't get to pick that 1 specific stock that goes 10x----Up or down..... No big drops on an earnings miss- Yes, market or sector risk of course- should be easier to get a handle on the forces at work there- Caveat Emptor: Since my time, focus, and thus-dedication is limited, my selections are not necessarily done with any systematic etf analysis as to why I select one from another- perhaps familiarity- If you have some ETF suggestions, or constructive criticisms, please feel free to share . I borrow freely LOL! Thanks for posting!
It sounds like you are indeed prepared! As i got up this Sat am, I find my router is again not talking to my modem! HP tech support got my laptop able to access the internet again-At a cost of $50.00 + $15.00/month for a year's worth of support- I look at that as insurance . Additionally, my wife has just given me her old Samsung. Requires a wireless signal though,and is not on it's own separate account- I also downloaded the IB TWS on it, but haven't tried to use it yet . Livin and learning to use the newer technology- Thanks for posting!
Got some shopping done this weekend and an excellent day navigating the mall with the better half! Getting back to ETF's- Things are going higher as we end this December- I took a small position in Cure today as it pulled back and met my lower limit buy- but it closed a bit lower- Counter to the market direction- An omen of what may come? Where is money flowing? "News" plays a lot of short term influence- I'm not sure the WHY for the decline in Cure today- But the nat gas play FCG and the corresponding UNG were strongly affected by comments from the Saudi minister- ready to keep producing despite the lower prices it appears? What is interesting about the nat gas play is the disparity in price direction between UNG and FCG- UNG pricing is correlated with the futures mkt of nat Gas- While FCG is correlated with stocks involved in the nat Gas industry. UNG had a substantial drop over the past few days, while FCG tried to rally, but declined today. Which also caused me to react by tightening stops that will get executed on any further weakness. As the energy market declines- Opportunities will become available for a value investor to BUY - and where is the bottom? As energy had rallied- Perhaps there is another leg lower yet- Tactical trading takes smaller profits-also suffers smaller cuts. Conversely- as energy costs decline- another sector(s) benefits- The consumer- and most industries that use energy- Perhaps for the long term investor- this presents an opportunity to reallocate assets to a sector that is close to being oversold? 2 charts - FCG- active trade -with raised stops on signs of weakness- and UNG.
12-24-14 As the week started off, I was determined to not chase the market- I put a limit order for a small buy of CURE- $134.50 and it was filled as CURE dropped lower- In the news this week was an issues with GILD and a care provider- and that shook the entire healthcare/biotech industry. At home today- it appeared that the selling may have been market wide rection to a stock specific news- although the bigger fear is there that it could extend.....to other biotech companies- I added another 5 shares at the open, and 5 additional shares at 10:00 as CURE moved higher-Brings my avg cost to $128.67 in this position. I also added 10 shares in IBB $298.08 the biotech index- A big overlap with these 2 positions in terms of market focus- Both are up some 2.5%+ from yesterday's close. OIL declined further this am, FCG position hit my raised stop $11.39- small gain there.
12.26.14 3:00 pm - Got home early, Market in session It appears that the market reaction to the healthcare/biotech sell-off saw additional buying today- including GILD- CURE is presently trading at my average cost, also will allow me to tighten up my stop-loss for next week. Note i entered back into FCG after it climbed higher- thinking it was going to make a larger upmove after the pullback whick caught my stop by $.03- I was stopped out on that second trade for approx a $30 loss. Oil looks to be going lower, along with Nat Gas- Some great value buys in those markets for patient investors. 9 out of 10 weeks positive for both the Dow & S&P. Wow- I also noticed that the SPY was struggling Wed to close in positive territory , and looking at the $vix -felt that we are overdue for a few day correction- I had purchased 500 TVIX at a cost of $2.274, 12-24- with an initial stop of $2.20 on the entry- However, that Risks approx 8% on the trade- and that is not a justified % to Risk , just to be thinking i am 'right' in this thinking that there has to be a counter move- even a short one very soon. This was an extension of the prior UVXY 'sample' smaller trades made earlier- I don't like the way the UVXY tracks and declines, so I thought I'd try TVIX- but I should not have gone in with 500 shares-There was no technical support to make the trade- Qualify it as an impulse trade- and usually impulses come with regrets. I could have reduced the position today at -or above break even- and perhaps i should have- but the volatility was climbing going into the close- ,but at the close came back in lower. I did take a different trade in an even narrower sector- PSCT- Small cap tech. I was also looking at the TQQQ- tech sector testing prior highs, lagging the SPY- Noting that this year the small caps have lagged- $RUT - some of the market pundits are suggesting that due to the dollar's influence on overseas markets, the large caps may find a headwind due to their global exposure, but small caps may find a recovery- With the market news about Sony & hacking-in general as an ongoing company Risk for all companies-Target- HD- Banks- Why not try a small cap Tech ETF? Small cap as having lagged the market- Tech as having leading innovation - PSCT was chosen as the 1st one that came up on a search- and the chart showed it breaking higher from a several week consolidation. This is not an investment per se, as it is a shorter term trade- Trying to ride with the tide of the market momentum, but not jumping late onto the SPY momentum.
IBB ENTRY- After I missed the entry last week back into the market-and the market rallying, - I was looking for a reason to get back into the healthcare sector-Cure specifically- With the issue of Gild & express scripts knocking the wind out of the entire healthcare sector, there was a sharp 2 day decline- and then buyers jumped back in- . I entered Cure & IBB- which overweights the sector- approx 50%- in my trading account. Since the trading account is relatively small, the goal is growth and instead of being properly diversified, (diluted) fewer and more select positions are my intent- My entries in both trades caught a bounce off the bottom- and ideally that turns into a multi-day trend higher- What is opportune about getting in at these tighter levels- and the IBB chart I am posting illustrates this, is it offers a very low RISK as the entry occurs slightly above a defined turning point that has some TA basis- In this case- a dbl bottom on the 2 hour chart sets the low. Conventional Position Sizing saved me from myself over the years- and if i encounter a series of losing trades, i will revert to that discipline. Position sizing would perhaps divide the account into 5-10 positions , and no single trade would be allowed to lose more than 1- 2% of the portfolio value. (I used 1% as the position sizing basis- a good measure- as losing trades do not always cooperate with hitting & filling just at the stop-loss) Using The IBB trade as an example- Account value is $ 9745 The IBB position is 10 @ $298.18. $2,981.00 initial entry plus $1 commission. This single trade is 30% of the account value-If I also add in CURE- $1929- The healthcare sector exposure is $4910.00 . or 50% of the portfolio value. Conventional asset allocation suggests this is very Risky-per se. Too many eggs in one basket. For conventional investment accounts- yes. Conventional position rules are that no individual trade should Risk more than 2% of the portfolio value. If one holds 5 portfolio positions, and all are highly correlated with the S&P- If the market takes a dive and all 5 positions are stopped out-for the max 2%- on each, the portfolio hit would be 10%. If one is an investor with a 'wider'stop- what is the cumulative loss exposure should an event occur where widespread selling occurs for successive days? Makes a case for periodic adjustment of stops higher- The IBB trade -as well as the 2 Cure trades- both are examples -IMO- of well executed entries on trend reversals that have the benefit of defining the point of failure where the trade has failed-, that point of failure sets the stop-loss as a line in the sand- that should not be violated or the presumption for the trade has turned and is no longer valid. What is best about this type of early entry-Is the logical and very low $$$ Risk associated with the trade- Despite the overweight position IBB has, this stop-loss is less than .5% of the port value- Note that I am assuming this will result in a resumption of the prior long term bullish trend- I think this is an important distinction that some may overlook-but should not- I have enventually come to realize my most likely successful trades are those that plan to go With the trend- Counter trend trades should be short-snap trades that will fail quickly. Getting back to the point about position sizing and being overweight. These 2 positions are overweight- but the potential Risk is relatively low to the overall Portfolio value. [