+ $20 LTM, RSH, and TOL were on my short list for the morning and Etrade upgraded their platform and I couldnât log in. Tried loading old version, new version, nothing worked and they were overloaded with support calls and I had to wait for a call back, which came much later. I just kept trying until finally the platform opened, but by then the big moves in these stocks were done. I spent much of the rest of the day studying various patterns that I'm learning about and never really bothered investigating in real time until recently, bull flags, bear flags, cup and handle, trend line moves compared to volume. I also remembered my friend Mr. Weinstein once telling me to spend a day trying to lose money and see what happens. So again today I paper traded, trying to lose money by trading either the opposite of what seemed to me to be very solid setups, or trading what seemed to be quite iffy. All but one of these paper trades was very profitable. HANS today provided me with a strong reinforcement of why we have stops on every trade not just 95% of them. I used to scale into short positions that ran against me at or near 52-week highs figuring they would always pull back at least halfway to oversold from overbought. I played HANS a few times this week, with loose stops, but stops nonetheless. Yesterday HANS hit highs on the day and was in the mid 37âs, an area I find to be very strong resistance and always good for a short, but I did not put on a short position yesterday to take advantage of the morning volatility. The reason is because HANS has been ranging for weeks and after establishing slightly higher lows lately, especially each of the past 3 mornings and rising to steady resistance in the 37âs, it had that bull flag look on the Daily chart chart and I decided it might break out soon. I havenât observed these signals long enough to feel confident acting on them, but wow what a breakout day HANS had. It was a solid reinforcement of why you always trade with a stop rather than assuming something that hits a new 52-week high has to come back down. Once HANS broke through the 52-week high today it was new highs all day, a full 2.00 a share above the previous 52-week high from last June. I did have one lazy trade today, since it seemed to require little attention. I shorted HST @ 6.99. It totally consolidated in that range for so long instead of breaking down and the market is so irrational that I figured it would very likely continue what it started in the morning, so I covered for a $30 gain. After about 45 more minutes of stagnation, it took off on a big buying volume bar. I was glad to have exited. I have read in several places that if a trade doesnât go your way in a short period of time, get out. You got in based on a setup and the setup should start working without too much diddling around. HST was one of my irrational paper trades. When it kept hitting new highs after the break out of consolidation, I decided to go long @ 7.48 on the pullback from 7.50 (keep in mind I thought 6.99 was a good short earlier). It dipped to 7.39 and continued its uptrend, all the way to 7.88, before finally falling back down through the intraday MAs. (I've no idea why I didn't short it in the 7.80's, just been in "laying low" mode lately.)
NoDoji, I enjoy reading your journal. One site I like to look at is http://www.shortsqueeze.com , it really helps me when I feel like shorting something just because its high seems irrational to me. When you see that it has 30% short interest or something like that, you begin to realize it's not irrational at all, the shorts are buying because they're in pain lol. It's definitely a hard thing to do to learn to separate the stock from the business (at least partially - a short squeeze can make P/Es look really irrational). I'm definitely still learning it.
Hi Susannah, Yes, I always check short interest for exactly that reason. Now I'm considering long entries on pullbacks with these irrational runner-uppers! It sure has been working on paper. This has been my toughest lesson to learn: There is no high price or low price, just a price based on supply and demand. Once I can truly get my head around that, I'll have the guts to go long a stock like HANS close to its 52-week high even while it's overbought on the daily chart. How much sweeter a 2.00/share profit than fighting for .40 or .50 cent moves!
Nod Hint !!! Drop the overbought/oversold indicator. Do not use conflicting indicators relative to your "NEW AND IMPROVED" strategy. Price is the only item that makes the bottom line look good or not. Plan your system (making money, , ha) around what makes sense to anticipate price movement. Let that sink in or as you say: wrap your arms around that. Think of it this way, indicators tell you about what HAPPENED, you are wanting to catch what WILL happen. Try using more anticipation and insight into what the other players would be looking for. Support, resist, continuations, reversals. use, the clues the mkt gives you , 50%, flags, hooks etc etc. Anticipate how a price move will work on the psychy of the other players. Historic indicators like overbought/oversold stuff are NOT going to look ahead, they look backwards. PRICE ONLY tootsie, price only. :eek: http://www.youtube.com/watch?v=QlqOv-9qgLw&feature=related
+ $118 Day + $704 Week I actually got in some trading today, but still mostly laying low, rousing the better half from his slumber each morning and letting him collect the coin this week. His weekly P/L looks like mine did from January-March; I guess I trained him well 11:06 a.m.: Short HANS @ 40.05 on 3rd lower high, overbought, SPY overbought, with very tight stop @ 40.15 just above previous resistance, because slightly higher low put a small hitch in an otherwise strong short setup. Covered @ 39.87 for an $88 gain, catching the entire move, give or take a couple pennies on either side. An immediate long entry when I exited HANS at oversold wouldâve been superb. I wonder if a lot of traders do this, trade back and forth long and short, because it seems that once the first hour of trading has laid in the stockâs âpersonalityâ, or later in the day in a range, you can work this tactic successfully. 2:03 p.m.: Short TIF @ 28.70 off a lower high, covered @ 28.49 (a bit early) for a $105 gain. 2:31 p.m.: (Rule violation on this trade) Short RSH @ 13.37, pullback from overbought formed a lower high, stop @ 13.50, because any price reversal would indicate further upside. Then for no apparent reason I moved my stop to 13.60, eventually hit for a $113 loss. Needlessly gave away $63 by moving that stop. Then I did my typical âmove on to something elseâ instead of keeping an eye on this one for the better short entry, which set up just 20 minutes later. (Several people have asked me why Iâm interested in trading ES, and this is the main reason â ADD when trying to track more than one chart.) 2:45 p.m. Short HANS @ 40.07 when it dropped back from overbought, looking for a quick pullback move. Covered @ 39.99 for a $37 gain when price stagnated there for a while and it became oversold, indicating possible break to the upside. That indeed was the case. 3:10 p.m. Short HANS @ 40.10 pullback from run up. Covered @ 39.99 for a $53 gain, when it again stuck there and became oversold. A bit of patience wouldâve paid off, as price finally broke down a bit more at the very end of day. This was a nice âcool offâ week, taking it very easy, but with 5 green days to put me mentally back on track. I give myself an A- for solid discipline this week. The minus is for moving my stop today. I give myself a D for staying focused, but that is an ongoing problem for me and I believe itâs the tamoxifen I take; my doctor said some people become easily distracted and unfocused after taking it for about a year. But I have only one more year left, then no excuses! And my lack of focus is why Iâm interested in trading ES: Just one thing to focus on! (ES traders, does this actually make trading easier???)
I trade the ES. On the plus side there's only one thing to focus on as you mentioned, instead of a bunch of stocks. It trades thru only one exchange, so if price passes thru you will always get filled 100% of the time (unlike many stocks). There's absolutely never any issue with shorting, it's no different in terms of ease than going long, and that's a huge plus. Lots of liquidity, more than you'll ever need no matter how big you get. Favorable capital gains tax structure. No need to keep track of buys/sells for tax purposes, just one figure at the end of the year. No Wash Sale concerns. For those with less than $25K in their account no Pattern Daytrader limitations. On the downside you are trading against some of the most experienced and very best traders/quants in the world, something not found in almost all stocks. Because of that the market is incredibly efficient and you will see more headfakes and false moves than you ever imagined in stocks. The massive liquidity means you won't often get filled on the number, price will have to pass thru. And there's a reason why just about every successful trader in the P/L thread trades stocks, not index futures. In short there's no perfect vehicle, everything has plusses/minuses and trade-offs, but give it a try and see if it suits your style and temperament.
Have you thought about just trading SPY for a few days to see how you like it? That is just about equivalent to trading ES, except you can keep your size smaller and the tax treatment is different.
Had a peek to see how you were doing this week...glad to see it was profitable. I read your comments with interest related to trading ES. I have a couple of suggestions before you proceed any further and a comment related to your "lack of focus".Far be it for me to be offering advice, but it may help in this instance. Suggestions...1. Before you do anything it may be of benefit to read, say the last 20-30 pages of ES Journal. It will provide some ideas of traders who offer their thoughts and post trades...some appear to be in cryptic, but you will pick up the "flavor"... 2. Assuming you decide to trade ES, be prepared to set a specific amount you are PREPARED TO LOSE and accept you may lose that money.Personally, I believe that unless you have developed that mindset, I do not believe that ES is for you or anybody else for that matter. 3. Make sure that you have a good service....ES is time critical and it waits for no one. 4. In my opinion, stop losses are ESSENTIAL and must become part of your "routine" when trading ES. This is just a few thoughts that could be of benefit to you. Focus, or the lack thereof, is very important while trading the ES and even when you don't have an exposure. The ES is somewhat "psycotic" and will behave that way in just about every trading session and quickly without any obvious reason. I feel your current concerns related to your lack of focus may be that you may not have ABSOLUTE faith in what you are doing or there are external things "interferring" with your trading. You are welcome to PM if I could be of assistance .
Thats a really good idea. Or the QQQQ for a smaller price if you want as it tracks much the same. GREAT WEEK Nod !!! After getting beat up you can start to doubt and wonder if things will ever get better or if its the end. Way to pull through that and take home a gain for the week. Have a good weekend !! Bob