Weinstein Trading and Fading

Discussion in 'Journals' started by Robert Weinstein, May 5, 2008.

  1. Welcome to my journey on the road to hopefully kaizen (continuous improvement) with trading. I have traded the markets on and off for over 23 years (since I was 16).

    After reading many books and especially Tom DeMarks books I became convinced of a few things about trading.

    1. Most people try to find a trend and trade it. Along with that most people lose money in the markets. So you either need to find the right trend and early or you better be able to find the end of the trend.

    2. Most market makers / specialists fade the public / professionals. Along with that most MMs / specialists make huge amounts of money. trend followers have to be very quick to take losses and be able to stay in when the trend is going their way.

    3. when you enter a trade by following a trend you normally give up the spread as well as take away liquidity. This causes you to be at a loss from the start and causes you to pay a higher commission (ECN pass throughs )

    4. By fading you can actually collect the spread (usually very small but over the course of a year or more will add up) and you can lower your cost of trades if you use IB or someone that gives you ECN passthoughs( I have used before and will be changing over in about a week from TS to IB for my primary broker)

    so what i try to do is find overbought or oversold situations and then 'fade' the stock or find the points in a trend where the stock is signaling it will continue further. I use software (currently Tradestation) that scans the market (preselected group of about 900 stocks) with algorithms that I have worked on and off for the last six years and dedicated about the last year or so on. When they started working consistently I thought I would make a journal to improve my results by looking for patterns.

    I prefer shorting more than going long so my first push was for overbought signals and now i started working on oversold. I will need to test them for a while before you see very many trades that are long.

    I trade intraday as well as swing trade. I am willing to buy and/or sell options to get into a trade and/or to hedge a trade.

    I also like to sell EFPs to gain extra 'interest' income with the overnight balances.

    Because as of the start of the post IBs commissions are so small I have not gone with a prop firm. I have averaged about 15 cents per hundred shares net cost(.0015/share)

    My swing trades I will post in real time in the journal. My intraday trades I post as calls and in near real time in the ET chat.

    Of course the calls and the posting is all based on my ability to do so without effecting my trading.

    I think the ET chat room is a hidden treasure with a great bunch of very knowledgeable guys.

    I use ARCA for my listed trades and Island (smart on IB) for the naz stocks. I do not jump in or out of trades with both feet. I almost always pick an area of entry and exit resulting in scaling into and out of most trades.

    For leverage i rarely use it unless I am in several trades at once.
  2. I can comfirm that 1R does give out live calls in chat during market hours.

    Good on you for starting this journal, 1R :)
  3. sg20


    Personally I don't think you know fully well what is the trend or what the trend can do for you. I am not here to teach but there is nothing like the trend if you know how to trade it. Good luck.

  4. 1R,

    Very interesting journal it's going to be, I was always curious what your style is and will follow it with great interest...

    Good luck!
  5. MIR appears to be at the end of its upward trend and is setup as a short.

    There is an earnings conference on May 8th which is really good as it helps the timing of the entry.

    If the conference goes well and MIR moves up on the 8th I expect to see the pivot point on the 8th or the 9th.

    A really nice pattern would be the stock moving up to the report and then moving strongly up with last gasp of buyers coming in.

    I will be looking to short on a high during May 8th and 9th.
  6. Keeping the powder dry for the swing trades as we watch the following for a complete of the trend.


    I did manage to do some day trading today. I also was able to close out yesterdays carryover at a profit. (SPN)

    Out of the five day trades only one really gave me any trouble. HK acted very strange and closed at 26.39 only to be trading in the 25 price range within mins after the close. (earnings report came out and it appears the street didnt like it)

    +1282 for the day
    +1848 for the week
    + 3787 for the month
    + 42751 for the year
  7. Hello SG20,

    Thanks for taking the time to read the start of my journal.

    I am unsure without any trades entered in you came to the conclusion I don't know what a trend is but hopefully I will be adding some value with this journal.

    My goal is to identify the start of the trend before it actually begins by finding the end of the opposite trend.

    With people like Richard Dennis and Willian O'neil and the likes I feel I do know what a trend can do for your account.

    Thanks for the well wishes and I wish you the very best in trading
  8. Thanks Will, nice of you to say so.

    I wish you great trading as well.
  9. thanks CF, glad you could drop by.....

    It will be interesting to see how this goes.
  10. watching MIR as its appears to already be falling. I did not short it based on the earnings report coming out tomorrow.

    BWA is closed to confirming the end of its trend. Should be able to get the answer within the next four - six days.

    I did day trade a few today and that went well. I don't normally trade oil but I did short oil and when it didn't fall as expected I closed out with a small profit.

    I still have the covered UAUA open

    + 2094 for the day
    + 3942 for the week
    + 5881 for the month
    + 44845 for the year
    #10     May 7, 2008