Sunday, September 03, 2006

scalping ER2

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Click to enlarge

Wednesday, August 30, 2006

Looking back at the hot stocks

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When will ERS, TIE, HANS, ISRG and NTRI stop going up. During the summer, when the bears come for lunch and the hedgies pull their money out of the speculative stocks and into oil and big caps, that's when. What's happening now? Oil money's going to tech, and metal stocks are flat-lining. The next week should tell us where things are headed for sure. Q's are getting ready to break 39, and then we are going to rip to the upside. I would be long SMH and short XLE even though we have hurricane threats.

Sunday, August 13, 2006

My video lesson for the week

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Here is a video of a bear flag setup I recorded:

Thursday, August 10, 2006

Time to learn

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Starting tommorow I'm going to record my charts that I'm watching and also my TWS quotes where I place trades while recording. I'm going to give a reason for the trade entry with a profit target and a stop loss. I will be trading futures, oil sector, and volatile stocks. This is so that I can go back and review my trades in real time and figure out what I'm doing right and wrong.

Strategies on Oil stocks

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When the oil numbers come out, you want to be on the same side of XLE or similiar sector stocks 30min later. Some good volatile stocks this works on is DVN and APC. The last couple of times the numbers came out we chopped around for 30min, and then broke out and trended up all day. So keep a note when the numbers are due. You want to be on the same side of the trade 30min after the announcement for a high probability of good trending action.

Monday, July 10, 2006

More strategies

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I need to test new strategies. I need to also review pair trades. Overall, after watching the market for the last month, I think it all comes down to watching the active sectors for the day, watching the futures, using S/R lines, trend lines, and evaluating trade entries based on high probabilities. The initial entry may not be perfect, probably will rarely be spot on, but define your risk, and give yourself time for your target to be hit with a trailing stop that won't get hit off of 1 or 2 ticks.
I would like another monitor so I could watch 80 stocks. Right now I watch around 25 charts. I would like to have charts for all the sectors and the major stocks in the sector. I would like a porfolio with a list of all the stocks in that sector so I can pick who is the leader and laggard. I would like a porfolio of all the volatile stocks as well. Also I should make a porfolio each day of my scans of hot stocks that meet my criteria, whether it be new highs/lows, % gainers/losers, or large intraday range and volume.

Tuesday, June 13, 2006

New correlation stuff

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I found another website where you can run correlation between stocks and ETF's at www.spdrindex.com/correlation. I need to focus more on leading sectors as my leading indicators. I think I'm going to start using Ben the S&P broadcaster to help with my trading. I'm going to see which index is leading and lagging. I believe the Nasdaq has been the leading indicator to where things are headed. The Techs haven't been getting beaten as badly as the other sectors probably because they are already beat down pretty hard. I notice that there was good volume on the moves to the upside today when looking at the indices. Also, the VIX is at 23.81. Great volatility for day trading. I just need to practice and get better. I'm looking at the VIX and it is the smoothest looking chart I've ever seen, with nothing but trianliar patterns.

The question is when this trend line will break. Stocks like TIE and HANS are getting beat down hard, rightfully so. Just when you want to buy something that seems like it will keep going up forever it normally is at a peak and you can suffer some serious loses if you don't use stops.

The VIX today ended up 13.6% at 23.81. The long term trend line on the VIX has been broken. We are in BEAR COUNTRY!


VIX to $30?

Friday, June 09, 2006

An intraday variation to Pairs trading, my style of trading

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It took me a while to find a strategy that worked intraday that would give me signals for high probability trades to occur. I use to try to trade stocks which had very little correlation with each other, and I use to only watch a couple charts,,,that was a waste of time, however I learned chart patterns and high probability setups.
To know how to trade, you must know how the market is connected. I suggest looking at the market from a top down approach and then narrow it down to a few products to trade.

1.You must realize that the futures like the ES,YM, and NQ are your greatest indicators intraday. (you may also may take note of the EURO and Bonds,,however,,these often react to whatever the futures are doing)

2.The TICK and TRIN are your second greatest indicators

3.The index in which the stock you are trading is third most important (and you will want to find an index which has high volume and has a high correlation with the futures,,things llike XLF,XLE,SMH, are good choices for their volume, obviously SMH is better if your watching NQ, and XLF or XLE would be better for ES/YM)

4.In the index you are watching, there may be sub-sectors,,and in these sub sectors you may find stocks even more correlated. For example you may like the financial sector; XLF. If you choose this sector, analyze to see which stocks are most correlated, and which stock often acts as a leader in the moves and which is slow and catches up.
To see what I mean look at this:



5.Now that you have your basket of stocks that you watch everyday, you will watch to see which stock makes the first move in a particular direction, and then you will decide what stock from your basket is most likely to catch up. You do not short the leading stock, that would be stupid, because it will continue in its direction and it's advancement may grow stronger as the sector grows stronger from all of the other stocks catching up. Obviously, your sector is most likely going to move becuase of what the futures are doing.

6.To be good at stocks, it really helps to know how futures trade and how to trade using the TICKS. When trading with the TICK, you look for a higher high or lower low then the previous TICK, and also you need to take note of apparent trend lines on the TICK chart, which when broken, will cause a reaction in the futures, which causes a reaction in your sector and a reaction in its underlying stocks.

I probably watch 15-20 charts during the day. I personally use 1min charts(sometimes 12 sec charts) for trading and when I see a trade setup I just turn my eyes to the bid/ask spread and look for the best entry, I trade the YM and a basket of stocks at the same time, first taking an entry on the YM and then getting into stocks. If I was correct on the YM trade, then my trade on the stocks will pay off too. Most of my trades are in the black within 20 seconds, however, sometimes the ticks may give a fake out and I may have to add to the position before the ticks break the trend line and start moving my trade into the correct direction. I look for an exit on the YM at tick extremes most of the time, unless I'm going to hold the position longer. The exit on the stocks will be after the exit on the YM because the stocks are slower to catch up. Also, it is in your best interest to trade in the direction of the moving average. If you miss a reversal, it is very likely that the trend will continue and you can enter on the next bullish/bearish candlestick harami. However, the point to this style of trading is to notice the reversal in a leading stock, and get into the slow stock before it is bid up or down. While the leading stock may start rolling over along with the ticks and YM, my lagging stock may be at its high, which is perfect for a short entry.

So, when your trading, I would suggest you use a futures contract, the tick, trin, a sector, and a basket of highly correlated stocks. With my strategy, you trade only one direction, which is the direction of the futures, and there is no short the leader and buy the laggard like how Pair trading is based. The ORIGINAL pair strategy works best between different sectors, not between two stocks in the same sector. Also the pair strategy works best on a much larger time frame then intraday if you were to actually try to trade a real "market neutral trade", for example:

This is a classic example of what a pair trade should look like between anti-correlated sectors, you would want to be using options that have many months of time decay so less capital is tied up.

Tuesday, June 06, 2006

Pairs- Market Topology

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Pairs trading works like this. You have 2 highly correlated pairs in which you want to follow. It doesn't matter which stocks moves first in a particular direction, the key is to get into the laggard stock which will eventually catch up to the leader. Also, you have anti-correlated pairs, in which case you want to short when your stock goes up and vice versa. Here is a great example of 2 pairs(CHK and ECA) and it has 2 corresponding anti-correlated pairs(AMR and CAL).


Here's a Pair:


Depending on what type of trader you are, this strategy can be used for swing and day trading. Also, a good website to use to find pairs and anti-correlated pairs is www.market-topology.com.

Thursday, June 01, 2006

ARB'ing OIH.

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It's working, but I still need to practice my exits and work on hot key stops. Also, I need to have IB on speed dial incase the cable goes out, which has happened in the past. Maybe I'll use market orders with far out stops incase the internet connection goes down, that way I will be protected somewhat, even though I would prefer to close the posistions as soon as the internet connection goes down.
I'm watch the highest weighted stocks in OIH and the volume leaders for arbing opportunities.

Wednesday, May 31, 2006

A TRADING STRATEGY

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I have found a way to consistently trade the last few days with a solid profit. I'm hoping I get some real choppy markets so that I can test my new strategy. I talked about ETF arbitrage in one of my old blogs I no longer write in. I said that it was not worth the effort and that I didn't have the advanced software needed to make money at it. Well, these last few days I have been doing ETF arbitrage on my favorite sector; OIL. I've made movies, and you can see for your own eyes how well this strategy works, but in order for you to trade this way you have to use hotkeys and be prepared to react to an oppurtunity in no less then 2 seconds. My average trade is held probably 1-2 minutes.

Consider this. If you are following the leader stock and using it to trade the laggard stock to gain your profit, why not hedge your position with buying multiple laggard stocks instead of just one, that way your are diversified or "hedged" in the postition.

Monday, May 29, 2006

INSIDERS BUYING RNAI, LOOK STOCK MANINPULATION!!!

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MARKET ANALYSIS

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When I look at the VIX, it makes me want to buy.


The Biotech is bouncing pretty good. It may be a good short setup, however this is contigent on DNA and AMGN.



Check out the NYSE A/D line. It looks like a 2B setup to me.

My plan-It's a work in process, this stuff takes time to learn

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First, I will take a look at the futures premarket on tuesday. Then Depending on the opening price I will go long or short of one of the stocks I'm looking at. Also, I'll scan for news before the trade. The target will be small, but a small profit target has a higher probability of being hit, so doing many of these small trades should add up over time. Of course all it takes is one bad trade to wipe me out.

I think INTC and MSFT are going down even further. INTC to 15 and MSFT to 22. I was thinking of the Jan 07 puts on both. The ITM puts are best on both, 2 strikes ITM.

Overall, I don't think the market is going anywhere this summer for the tech sector, except down. Oil may rally higher. Natural gas I hear should go down. I think the metals may retrace, although it tends to move in the same direction as oil. The US dollar is very weak right now and is near its lows, if it rallies, the metals may be a good short. Also, we may have our usual hurricane season down in the gulf, which always helps the oil sector.

Interest rates should continue to rise, and the market should setup nicely for a bearish market this summer and maybe continue to the fall if the Fed thinks its neccesary to keep raising the rates. Considering inflation and the current status of American debt at all time highs, and the housing market declining, and oil going up, it is a good chance the market may turn bearish. WHAT's there to be BULLISH about, unless interest rates are lowered.

I can day trade OIH pretty well by watching breakouts on crude oil. OIH trades smoother then most of the individual oil stocks like BHI, HAL, and SLB, but these 3 main stocks are good to watch because they make up the weight of OIH.

So I want to trade OIH, scalp GOOG the first 2 hours, trade options with lots of time value left (3months to leap options), sell futures options that are close to expiring(vertical credit spreads) and trade volatile small caps based off of the trend and opening gaps.

Overall, I'm bearish on the market, but I will trade stocks long intraday and using options.

Boiler room movie

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Sunday, May 28, 2006

Next weeks plan

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I'm putting together a list of stocks that are very volatile and have large intraday ranges. I'm going to swing trade these stocks based on the current trend and other strategies using morning gaps and volume analysis, while also taking into account any news that may affect the stock. I like the biotech sector because it happens to be a class of stocks that react to news in an extreme fashion and can provide for the oppurtunity to make some quick cash, but also on the other hand, you can lose it just as fast.

I want to stay on the side of the trend. I'm less inclined to go short on the stock unless I see an oppurtunity based on a spike in volume or the sector it is in is tanking, or if it has met resistance and is near the top of its trading channel.

Saturday, May 27, 2006

SPECIALIZATION,,,are you a specialist?

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I need to specialize. Knowing broad trends and strategies in general is nice, but you need to specailize on the stock your going to trade. Knowing everything about the company you are trading and knowing exact support and resistance levels can give you the confidence to make the right trading decisions. I use to specialize in biotech stocks. That's how I first got into trading. I would study the OHLC for the day and look at the volume. I would determine if the spike up in the biotech was valid, and if not, I would apply my shorting strategy, which would most of the time be a swing trade. I would make 5% per trade. Swing trades give you more time for your target to be hit. Options with time are even better, especially when you use credit spreads.

If your going to day trade, focus on the first 2 hours. If you aren't consistently profitable during the first 2 hours, then obviously you shouldn't day trade at all.

I've noticed that when a tick trend line has formed and it is broken, this sets up for a good trade in the direction of the ticks. Also, you have to remember what way the market is going. If we just had a 400 point selloff and we had a good rebound day , that rebound may continue as long as the trend line hasn't been broken. Also, take note of where the ticks have been most the day and where the trin is headed.

What it all comes down to is support and resistance, or supply and demand. People say, I want to buy stock XYZ for $10. If stock XYZ goes to $12, people are less inclined to buy, buy supply increases. As stock XYZ goes to $8, more people want to buy but supply decreases. Most of the time you need a catalyst to move a stock past a resistance or support zone. This catalyst is most likely news related, but can also be based on technical analysis of where support and resistance sit and where the moving averages and major trend lines are directed.

Things to look at:

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I'm thinking of a few things:
1.Analyze scalps made in only the first 2 hours of market open.
2.Analyze forex pairs.
3.Analyze earnings reports vs. stock reaction
4.Analyze high dividend stocks, with avg. worst max draw down in a years time.
5.Create option setups (selling calls/puts on futures, directional, vertical and calender spreads)
6.Create biotech watchlist, and swing trade news.
7.Analyze relationship between EURO and US stock market.
8.Create trading system with TS.
9.Put together list of the top 10 things you suck at when trading, and if you are good at anything, list those.

Things we need to bang into our heads:
1.When the market is up, don't short, go long.
2.Trade breakouts of support and resistance, and look for pullback for entry, also, see if having the market in the same direction of the breakout helps.
3.Trade in the direction of the slow moving average, and look for harami and trend continuation patterns.

Tuesday, May 23, 2006

May 23, stocks I'm watching

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I'm watching the oil sec, because they tend to give a better trend for my trades, where as like yesterday, AAPL and GOOG were sideways and choppy.(I traded the dead zone yesterday from waking up late).
Also looking at the metals, because of the volatility.
Stocks:
OIH,CVX
TIE, ATI, NUE
and also HANS and GOOG for morning scalps (they're volatile)
I will check the premarket on the metals and oil, and look for news and trade setup after the open. I will be recording.
Also, a short on PVX at the open for an ex-dividend short scalp.

Monday, May 22, 2006

Goals

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1.Continue practicing day trading using setups and money management.
2.Educate yourself further on finance(look into CTA, CFP, CFA)
3.Identify options trades and apply them in the simulator.(Put these in the journal)

Friday, May 19, 2006

Wait for pullback on trend line breaks

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It is common to see a trend line break that makes a pullback, only to leave you shaking your head and wondering if you timed your trade right. First, make sure you are using volume charts that cancels out noise in the charts, then look for valid setups. These setups should be preferably placed in the same direction of the market.










day trade team

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These guys have made some pretty good calls.








Thursday, May 18, 2006

My bad trades that I learned from

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Never trade options without a stop. Never buy options very close to expiration unless they are hedged.(just stay away from options near expiration until you get good at them). Have a trade setup that can be flexabile when trading options, by giving your self extra time(months out options), in case the trade doesn't go your way initially. Use strategies like collars, strangles, and vertical spreads when using options. Options shouldn't be traded like stocks. They should be given much more respect due too their volatility and value at risk.

Look for a trade setup with a large reward/risk value, on the weekly, daily, and intraday basis.

Be aware of breaking news, and protect yourself from catasrophic damage by having your stops placed incase something bad happens in the market.(or something good, if your on the short side)

Know why you placed a trade. You must give a valid reason for entering a trade, even though the market may be random. Obviously your reasons will be primarily technically based, but having some news is a real plus to buy or sell.

Know what sectors are leading the markets and what ones are lagging and determine which ones to be long/short.

Use indices and commodities as indicators when trading stocks.(for example, you'll want to watch the crude oil contract and the YM,NQ, when trading oil stock or the oil etf OIH.)

Tuesday, May 16, 2006

New ideas to try out next week

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My plans for the future to progress my trading career:

1.Find the stocks you are going to trade for the day before market open.(In this case, I already have a dozen that I'm familiar with trading, and I'm hoping a couple of these stocks will present a trade setup)
2.Know what economic news is coming out in the morning that can affect the indices.(I check out www.deltat1.com for important economic news and check out the indices pivot points and analysis, and also check out yahoo finance news, and www.tradethenews.com, and also I have CNBC up, sometimes I have bloomberg running on my computer, but I have to shut it off before I start trading or else my computer gets too slow.
3.Wait for the market to react to whatever economic numbers come out and try to determine how the market is going to trade that day.(I watch the futures,NQ,ES, and YM)
4.Have all of your charts setup for the different time frames you are looking at setups on.(I have 2 charts per stock,sometimes 3, and also a T & S window up and running. One chart is a volume chart based off of so many of shares traded, like 50s traded per bar, I also have a 24 second chart with MA's used as paintbar indicators. Sometimes I have a 3 second chart up that I use with T&S for trade entries and exits, and this is primarily only used for market open for quick scalps.)

5.Check out trading in pairs, spread trading, and stock short term hedges. Basically, I'm looking for stocks that follow an index, like the 20 components of the SOX, and I'm looking to go long the best looking stock out of the 20 and short the worst looking of the 20. If TXN or INTC look like they are leading the SOX/SMH, then I would want to go long the slower of the 2 and short the faster moving leading stock.
More on this idea later.

Friday, May 12, 2006

THE LIST (OF STOCKS FOR SWING TRADES)

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Long list: CMCSK, WCG
Weak longs:AOB,KNOL, GIGM,


Short list: STEM, GNTA
Weak shorts: THLD, ESCL

Thursday, May 04, 2006

Best time to trade for me is the market open, Scalping

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I will start to analyze my trades when I have more time.
I already know I'm over trading and that I'm taking unneccesary risks on scalps without good setups for a potential runner.
As it is right now, I trade best when there is lots of volatility, during the market open, which allows me to scalp, and sometimes turn scalps into good runners.
During the afternoon I try to scalp, and I get screwed, because of lack of volume and volatility, and also lack of patience and discipline to trade the right setup for the right time period of the day.
I will do more analysis of what type of trading I will be looking to commit myself to during the different time periods of the day.
For example, I may only scalp my favorite basket stocks the first 2 hours of trading and then leave with a profit. If I were to stick around and keep trading I would want to switch my style to looking for stocks with strong trends or chart patterns which show a potential breakout from a consolidation period.
I also need to setup my charts for the different time periods of the day. For the market open, I think the 6 second and 1 min charts side by side work best.
After the first 2 hours of trading, I should switch to 1 min and 5 min charts and start looking for the best stocks to trade based on chart formations.
When I have time I will record with my camcorder everything that I am doing for the trading day to help me with the analysis. I might use the computer screen recorder as well, but that tends to slow down things, and may only be good for slow periods of trading on 5 min charts.

Tuesday, May 02, 2006

Trading enhancements and refinements

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1.I would like to have my chart setup with crossover signals that will alert my with sounds, like when the CCI or one of the fast EMA's crosses one of the slower MA's.

2.I need to practice on charts on what the criteria is for entering a trade (what is the setup I'm using, what indicators and MA's and time of day and what are the indices and similiar stocks doing) and also a basis for a stop, which can be trailed up if my trade is profitable.

3. I need to analyze all my best and worst trades to determine the time of day I trade best in and the setups I do worst and best in. So far I'm profitable the first 2 hours of market open, but after that, I tend to get chopped up on taking bad trades, trades that don't really have a good setup, but were entered because I was bored and wanted some action, this of course is a terrible and a losing setup.

4. What scanners should I use to trade during the slow afternoons if any at all?

5. Should I devote a screen to www.tradethenews.com, or should I subscribe to the online radio?

6. I need to do analysis before the market open which will include major economic numbers, and news for the stocks I plan to trade. A also need to know the chart formations on the stocks and indices that I may be trading so I know whhere resistance and suport is and what chart formation and setup is occuring on the weekly and daily charts.

7. The most important thing I need to do, is practice my trade entries based on a set criteria using multiple time frame charts and remembering what the average daily range and remembering to use fibs and trendlines that can span back many days.

8. I need to go over each trade I made each day and how I could have made it better.

Sunday, April 30, 2006

James J. Cramer "Confessions of a Street Addict" book review

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I'm reading his book "Confessions of a street addict" and I'm really enjoying it so far. I always wondered how hedge funds operated, and this gave me a better clue to how the "smart money" makes there moves.
Once I'm done reading this book, I think I'll give it a complete review. Busy comes to mind when I read what the job was like for Cramer running the hedge fund with his wife Karen, Jeff, and staff, with making calls to CEO's, other firms, analysts, brokers, and spending a ton in commission to keep good contacts for what the brokers were thinking of promoting. Once Karen left the fund, things didn't run as smoothly, because her trading skills really made the Fund the best it could be. Also, Cramer is truely addicted to the market, with the market always on his mind, even when his wife is giving birth and when his mother is dying.

Saturday, April 29, 2006

RELATIONSHIPS BETWEEN OIL AND AIRLINES

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Potential Long Swings and other setups coming

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Metal stocks kick ass right now, but will the trend change?

Volatile Metal stocks!

Silver pairs (I like TIE)

Friday, April 28, 2006

1month chart on Oil sector

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I've been daytrading OIH and it seems like a very good vehicle to drive and pair with the major index and crude oil and XOM.

Trade setups based on type of trading day

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You may want to switch styles of trading based on what type of trading day your going into. If it's friday, you can expect low volume, and you may have a better chance at trading short term trends on the 5min chart instead of taking scalping on 1 min charts.
Also, be aware of big pending news that could decrease volatility and volume like economic numbers and FOC interest rate announcements. Also be aware of big cap earnings annoucements like MSFT had today, losing 11%, down to $24.15, and trading over 500mil shares for the day with over 100mil during the premarket.

Thursday, April 27, 2006

Trade setups with high probabilities

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Every trade should have a setup for entry. What's the premise for entrance",,,just because the chart looks good? I don't think so! You have to be aware of a number of factor before pulling the trigger. I'm putting together trade setups which the have a high probability of winning on a specific time frame for an expected amount of profit using indicators like MA's, stochastics, CCI, momentum, Elliot wave, MACD, time and sales, volume, time of the day, pairing off other equities, indices, and futures, the tick/trin/put:call ratio, and also pending news for that equity or sector it lies in and the underlying trend and major news for the day.

Good equities to trade

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Sunday, April 16, 2006

Check out the new Crude Oil ETF

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It began trading April 10, 2006.
The United States Oil Fund; USO, whose units trade on the American Stock Exchange, tracks the price of U.S. benchmark crude oil. The fund invests its assets in futures contracts for West Texas Intermediate light, sweet crude oil and other petroleum-based fuels traded on regulated futures exchanges as well as in forward contracts for oil and other oil interests.

Friday, April 14, 2006

Stockta.com and Barcharts.com

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DJI



GOOG



AAPL




BARCHART.COM









Small cap stocks tend to double

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It's a common phenomenon to see small caps double in a short period of say less than 1 month. Check out OTD and COR during March/April 2006, both doubled, and went further. Watch the 52 week high breakout on these small floaters.



CVC is next dividend play April 18 D-Day, it's extra special though

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Because of the magnitude(greater then 25% of stock value) you have to hold the stock extra long until after you recieve the dividend. Current value is 27.40,,I think I might buy monday and hold to April 18th or the maybe go for the dividend since it isn't taxed. Reading further, this stock may go private? hmmm,,,more research is needed

The dividend play worked beautifully

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Gap opened below 27 and the next day it came close to 29,,,,Dam I'm good.


free stock charts from ADVFN.COM

Tuesday, April 11, 2006

GAP dividend play for April 12 2006

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GAP closed today at 34.70(after hours 34.75) and has ex-dividend day tommorow with a 7.25 dividend, so the stock should open near 27.45. The strategy is to buy below 27.00 or short above 28.00.

Sunday, April 09, 2006

Dividend Plays

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Check out the website smartdividend, they give free updates to all the potentially good trades from dividend paying stocks.

Saturday, April 08, 2006

GOALS APRIL 8 2006

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I love pondering new goals to be met.

Goal 1- Get to 100k in IB simulator day trading GOOG(or other volatile stocks like AAPL).Figure out best strategies and avg P/L. Avg. P/L most be $200/day in order to coninue to Goal 2.
Question- What is Avg P/L since you've started Goal #1, and how many days has it been?
Question- Do you feel confident that you can trade GOOG live?
Question- What was your biggest losing trade in GOOG during this time and why?
Question- What was your biggest gainer in GOOG during this time and why?
Question- What trade setups do you like to trade on GOOG?
Question- What was your avg. holding period for a trade?
Question- What was your avg. profit/loss per trade?
Question- How many trades a day on avg. did you enter?
Question- What time of the day were you must profitable/least profitable?
Question- How many hours a day on avg. did you trade?
Question- What was the avg commission per day, month, year, and as a percentage of net profit/loss?
Question- What do you dislike about trading GOOG that you wish could be changed?
Question- What do you like about GOOG that makes it the best stock to trade?
Question- What would you trade if there was no GOOG or the stock split 3:1?
Question- What have you learned since trading GOOG?
Question- What is the most important signal for entering a trade and exiting?
Question- How do you determine where to place your stops?
Question- What is the best number of shares to trade GOOG on your trade setups?
Question- What trade setups do you use and why?
Question- What is the best time period to trade GOOG?
Question- What research do you do outside of live trading?
Question- What can help you trade better?
Question- What/who has helped you the most in your trading?
Question- What is effecting your trading positively/negatively?
Question- Where do you see yourself 1 year from now, 5 years?
Question- If your trading was compared to an hourly payed job, how much on avg. would you be getting paid per hour, 40hr, 1month, 1 year?
Question- What is it about trading that you like and dislike?
Question- How many hours a day on avg. do you spend researching the stock market? per week?
Question- If you had 1 million dollars, what would you do with it?
Question- What do you like about your life right now?


Goal 2- If you met Goal 1 and are continueing, it is time to fund your account with 26k. 25k is minimum, so the 1k extra is for leway.

Goal 3- The first 5k made stays in the account for trading GOOG. The next 5k can be used for swing trading index options, biotechs, and news/earnings/dividend plays.

Goal 4- Start your business. (Dividend tracker- a sight that gives you ideas to trade stocks that have dividends, blogger website making money of ads)

Thursday, April 06, 2006

GOOG Live Video training

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Click here to watch 'GOOG-tape-reading-1a'

This is just a test video I made, you'll notice the ask price is stuck because that's what happens sometimes on the IB simulator, which I was recording off of.

GOOG -TRADING SETUPS

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I like to trade box breakouts, no matter what the direction, but obviously its preferable to go with the trend. The trade is put on as soon as I see a candle breakout. To get in the trade I look at the bid and ask and time and sales to find the best entry in the next 10 seconds after the candle breakout. I'll buy or sell 100 or 200 shares with a limit order using hot keys, buying at the ask or selling at the bid. I'll initially put in a stop loss order 30 cents away. As soon as I go in the black, I'll re-adjust the stop loss to 3 cents away from the bid or ask, depending what way I'm trading. If I shorted at the bid at 400.50 while the last price was 400.55, I would have a stop loss order 30 cents away from my entry, or 30 cents from the bid at 400.80. As soon as the trade goes into the black I'll hit a hot key to readjust my stop loss. Here is an example chart.

On this trade I sent an order to short at 11:18:08(yellow arrow) and was filled at 11:18:16(green arrow). Quickly, GOOG dropped and I readjusted my stop using a hot key that sent an order for a buy stop that was 3 cents away from the last bid. I continued re-adjusting the stop 2 more times(making sure I canceled the old cover buys quickly so I wouldn't be stuck in a position if GOOG quickly reversed). My last buy cover was at the bottom green arrow at 11:18:11, with a buy cover on the current bid at 412.67 (My bid cover was 3 cents away from the current bid; moreover, my buy cover on the bid was 412.70, this is so that I wouldn't be taken out of the position, but giving it 3 cents of leway to decide what way it will go). The red arrow shows where my buy cover on the bid was taken out at 11:19:19 and my trade came to a close with a 34 cent profit, or $70 in roughly 1 minute.

Note- 200 shares were traded, if you were trading with 100 shares your fills may have been quicker and better, but you would have only $35 profit. I like 200 shares on GOOG because with the minimum 25k on a 4-1 margin it's possible to trade up to 100k worth of stock, great for big position sizing on volatile stocks like GOOG, also with my broker 100-200 shares is the same commission, $1, charging 0.005 cents per share. Low commissions is just another reason why high priced volatile stocks are great to trade.

Wednesday, April 05, 2006

Swing trading Company News

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Here's an example to swing, even if you miss the initial move. Suppose company X has good or bad earnings announcement. The following days after the initial news day will set a trend for the next few days most likely, so you can swing trade it for a nice profit. Also look for dead cat bounces. Check out the drop off of earnings for BBBY in December,
free stock charts from ADVFN.COM



Check out what happened to STEM when the said they were selling 11.75 mil shares of stock.
free stock charts from ADVFN.COM

Monday, April 03, 2006

Day trading High volume, tight spread stocks

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Here's the list of high volume stocks with tight bid/ask spreads:

GOOG =0.06-0.12 (limit target first hour of trading 0.30-0.70 with 0.80 stop, 0.08-0.15 with 0.20-0.80 stop for 1min scalps, during afternoon target 0.10-0.20, 0.50 for breakouts, use trailing stops on news reactions and major trends)

AAPL =0.01 (limit target for 1st hr 0.05-0.30 with 0.08 stop, 0.03 with 0.08 stop for 1 min scalps)

YHOO =0.01 (limit target 0.04-0.06 with 0.06 stop for 1 min scalps, 0.10 for strong trends)

NVAX =0.01 (limit target 0.02-0.06 with 0.12 stop for trade breakouts only, needs more volume and is too sporadic, highly reactive to news, 2 minute variance of 0.06)

HANS =0.20 (limit target 0.10-0.20 with 0.80 stop, 0.80 target for 3 min trends, needs more volume and tighter spreads for better trading)

ISRG =0.08 (limit target 0.08-0.16 with 0.50 stop, 0.30-0.50 for small 3min trends, trade intraday breakouts with trailing stops)

GNBT =0.02 (limit target 0.02-0.06 with 0.06 stop, lock in trailing stops for intraday breakouts and ride it 0.10-0.20)

FNSR =0.01 (limit target 0.02-0.04 with 0.04 stop)

BRCM =0.01 (limit target 0.10-0.20 with 0.20 stop)

ADBE (similiar to YHOO)

VPHM (similiar to NVAX)

IIP (trade breakouts 0.02 target)

ATML (trade the trend 0.04 target, long holding time)

NBR (similiar to AAPL)

KLAC (similiar to NTRI)

Thursday, March 30, 2006

Here is the FOC 5 day chart.

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Interest rates go up, equities go down, then rebound next day, then continue on current trend the third day, which is down.


free stock charts from ADVFN.COM

Well I was correct, but I SUCK!!!!!!!!!!

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I hate myself. I don't know why I'm living. I'm addicted to a game that I lose at. My analysis was correct. Today, I watched the market selloff. Then for some GOD DAM REASON,,,,no,no, excuse me,,,,no fucking reason at all,,I decide to buy, thinking it would retrace to the 38% fib. It didn't it stayed at 23% for 30-40min while I watched the ticks lose strength and the overall prevailing trend take over. I could have exited for 1-2pts, but I was WISHING for a breakout to the upside. I should have never gotten into that trade to begin with, for gods sake, I bought while the ticks were in the 400-500range, I didn't buy the pullback, I chased the trade. I was given 3 chances to exit to break even, but I failed, I lost 12pts. I SUCK. WHY do I sit and watch the major moves, and enter when things get choppy? I WILL NOT TRADE UNTIL I'M CONSISTENLTY PROFITABLE IN THE SIMULATOR. THAT IS GOAL #1!!!
Goal #2. Do analysis night before, looking at daily and weekly. Check for pending news on alpha1.
Goal #3-You suck,,repeat, you suck,,you suck,,you suck,,you suck. YOU SUCK.
Goal #4-U suck.
Goal #5- take the profit
Goal #6-why and the fuck do you put in such a huge stop loss and only take 2-5pt profit,why,,,why? Answer: You suck

Tuesday, March 28, 2006

I'm a coward

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The FOC annoucement came with an increase in interest as expected, and I watched the market drop 100pts on the Dow. I made some coin on the simulator, but I was expecting the initial direction of the market to go up, followed by a selloff, just like last time. I tell you what, that Bob Pisani can never guess the market, he was saying the market may turnaround in an hour after the annoucement,,,,tell me,,why? The market closed near its low, just like last time. Interest rate hikes are B-A-D, not good. Also, if you looked at the chart we are at a right shoulder, perfect timing for bad news and a selloff. I have a feeling that the market may want to bounce tommorow, but there is still a right shoulder in place that could come down for the next 2-3 days. I'm hesistant to be long tommorow for the rebound. Maybe thursday I can go short if we rebound on wednesday, just so we can complete the shoulder. Is it a coincidence that the market was near its high the last couple of FOC annoucements and we got a huge sellf off ending in the red?

Sunday, March 26, 2006

Trade setup for NQ

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I'm using MAC-Daddy and MA crossovers to help guide me in the right direction, but I will be entering trades off of price channel breaks, making me a breakout range trader. This is the only strategy that I see has the highest probability of capturing the move before its over because MACD and MA crossovers only tell you what way the index has turned after the fact, in which case the majority of the move has already occured, unless your lucky and its a volatile day in which the trend continues in one direction without getting choppy.Here is an example chart with entry points, the exit points are done with trailing stops. The NQ trades in 0.50 increments, once I get 1 pt up, I'll set the stop below the current price by 0.5, assuring a 0.5 profit. My goal is 1-2 pts per price channel break, and this is attainable, beacuse most price channel breaks move at 0.5-4 pts per move. With price channel breaks I'm only catching 25-75% of the move, but it gets you in quicker then any other indicator will. Most indicators get you in when the price has already moved 75-90%. For less volatile trading a 2pt stop loss can be used. For volatile trading, like at the open or when bond markets are closing a 3pm EST, a 5pt stop loss may want to be used when the trade is placed.
free stock charts from ADVFN.COM

Sunday, March 19, 2006

FOC day is coming

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I may trade the FOC day on the YM. I'm hoping for a good trend to occur after the annoucement like last time. Just remember the reversal the next day. Also, I could trade DIA options for an even better profit if done right.

Commissions

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If you trade futures, you may save money by leasing a seat on the CBOT or CME, by leasing a seat like IDEM for around $100 a month. About 1/5th of my losses are made up of commissions from IB. IB is not the best broker for futures, good for retail stocks, but not the best for executions and commissions on futures. J trader is good for futures, I like their grey box trading or "depth trading" platform, its similiar to IB's book-trader. I think knowing an equities avg. daily range is essential and also knowing the likelyhood of it closing near it's low for the day, and also the likely hood of its trend carrying on to the next days trading at the open.

Tommorow, buy GNTA and GNBT at open, sell for 0.03 profit or swing it for 0.10-0.20 profit. I like the swing idea better, to save on commissions.

Friday, March 17, 2006

LifePost's thoughts

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I work, but on my free time I sit in front of a computer and do technical analysis and research on the stock market. My goal is to make money. The goal of making money is for obvious reasons, but at this point in my journey it's more about being right and proving that I'm right with profits. What will I do with the money? I have no clue. I don't know what the point of life is, but I do know that if I'm going to stick around to try find out, I need money. I don't really want anything materialistic out of life, I just want to be dam good at something and enjoy what I do.
OK,,,,Back to the stock market,,,I'm investigating opening a Roth IRA to trade out of for tax purposes and of course I don't plan on drawing out of this account, its for retirement. Also, I've decided to switch back to trading stocks and options until I've become suberbly profitable trading futures, or until I develop my trading system with tradestation. I must say, IB sure kicks ass even though they have shitty charts. What it all boils down to is price, tape reading, knowing support and resistance, trends, and news.

I've found a statistically high probability trade that is a hell of a lot easier then ETF arb. Look for stocks with quarterly or one time dividends, trade them by shorting them at the open on ex-dividend day and place your limit cover at an easily hit target. Tell me, why in the hell the stock would not go down at all after the open on ex-div.? It always does, people are selling and taking the dividend profit, of course, the majority of the people doing this probably could have waited a day or week later to sell for a better profit, but they want to get in and out of the position with the least amount of exposure to risk. What I would do is buy 3-14 days before ex-div. and sell 1-2 days before, because there is a high probability on those big dividend payers that the stock will be going up before ex-div day. If I'm going to day trade, I better off go long on stocks nearing there ex-div days. Also you may notice 2 days before ex-div date, that the price declines, this is from guys like me that bought earlier and are cashing out, and also from people who want to stay away from the dividend. The best stocks this strategy works on are low volatile, highly liquid stocks with avg. volume over 1 mil and market caps above 1 bil. Also you should take note the current direction of the stock's trend and its corresponding index trend. There's one thing you must be careful of, and that is not shorting on ex-div day if the opening price is greatly lower than the adjusted closing price the day before. Example:Stock XYZ closes at an adjusted price of 15.00(16.00 stock minus a 1.00 dividend) and the next day (ex-div day)the stock opens at 14.50(0.50 below the adjusted price of 15.00), in this case, I probably would stay out of the trade. Here is a real example:
PCU-
Date Open High Low Close Volume Adj Close*
13-Feb-06 77.5 80 76.61 77.45 1,931,200 77.45
13-Feb-06 $ 2.75 Dividend
10-Feb-06 84.3 85.4 81.53 83.08 2,322,700 80.33


Careful shorting on Ex-div. here, the opening price is way below the closing adjusted price the day before.Although the trade still works, it has a higher probability of lower returns.

Here are good examples where buying 1-2 weeks out and shorting on market open on EX-div day works.
Examples: Buy 14 days out.
MSFT-
Date Open High Low Close Volume
23-Nov-04 26.52 26.7 26.4 26.53 70,459,696
22-Nov-04 26.75 26.82 26.1 26.65 92,410,800
19-Nov-04 27.03 27.07 26.84 26.86 85,808,600
18-Nov-04 27.13 27.17 27 27.07 63,249,900
17-Nov-04 27.25 27.35 27.06 27.17 58,830,700
16-Nov-04 27.33 27.34 27.05 27.12 64,522,600
15-Nov-04 27.34 27.5 27.2 27.39 104,468,000(short,max $0.14 P)
15-Nov-04 $ 3.08 Dividend
12-Nov-04 30.16 30.2 29.8 29.97 162,268,992
11-Nov-04 29.89 30.08 29.82 29.98 87,358,896(sell $29.98=$2.25 P)
10-Nov-04 29.92 30 29.69 29.73 84,097,696
9-Nov-04 29.43 29.89 29.35 29.77 100,401,000
8-Nov-04 29.18 29.48 29.13 29.28 112,802,096
5-Nov-04 29.21 29.36 29.03 29.31 95,337,696
4-Nov-04 28.38 29 28.38 29 87,867,696
3-Nov-04 28.65 28.65 28.31 28.47 79,666,704
2-Nov-04 28.26 28.47 28.03 28.24 89,417,104
1-Nov-04 28.16 28.28 27.96 28.08 72,930,896
29-Oct-04 28.12 28.15 27.8 27.97 80,010,096
28-Oct-04 28.11 28.54 27.9 28.01 63,059,600
27-Oct-04 27.86 28.35 27.58 28.15 72,392,600
26-Oct-04 27.71 27.9 27.63 27.9 76,966,600
25-Oct-04 27.67 27.77 27.55 27.63 61,529,500(buy $27.63)

AMTD-Buy 16 day before Ex-div.
Date Open High Low Close Volume
27-Jan-06 20.25 20.49 19.93 20.17 5,646,600
26-Jan-06 19.75 20.25 19.25 20 10,016,700
25-Jan-06 19.74 19.8 18.86 19.38 32,390,100 (short, max 0.88 P)
25-Jan-06 $ 6.00 Dividend
24-Jan-06 26.19 26.37 26.06 26.1 8,382,300 (sell 26,=$2 P)
23-Jan-06 25.81 26.01 25.7 25.97 7,782,500
20-Jan-06 25.61 25.9 25.09 25.51 6,648,600
19-Jan-06 25.78 25.9 25.35 25.65 4,483,600
18-Jan-06 25.49 25.53 25.05 25.33 4,992,800
17-Jan-06 25.97 26 25.5 25.62 4,537,200
13-Jan-06 26.2 26.21 25.8 25.93 8,026,100
12-Jan-06 26.1 26.25 25.86 26.04 11,929,800
11-Jan-06 25.5 25.93 25.5 25.7 9,022,500
10-Jan-06 25.58 25.58 25.16 25.21 5,867,900
9-Jan-06 25.25 25.71 25.23 25.52 5,416,400
6-Jan-06 25.35 25.35 24.95 25.01 9,867,100
5-Jan-06 25.22 25.45 24.76 25.11 7,238,700
4-Jan-06 24.86 25.26 24.75 25.06 9,608,300
3-Jan-06 24.15 24.64 23.86 24.55 5,510,000
30-Dec-05 23.98 24.15 23.58 24 2,932,900 (buy $24)

NAD- Buy 13 days out
Date Open High Low Close Volume
16-Feb-06 33.05 33.34 32.88 33.25 170,600
15-Feb-06 33.04 33.27 32.55 32.95 163,000
14-Feb-06 33.35 33.35 32 32.9 346,500 (Short max 1.35P)
14-Feb-06 $ 1.88 Dividend
13-Feb-06 35.71 35.99 34.7 34.76 451,600
10-Feb-06 36 36 34.26 35.68 596,100 (sell 35.68=$4.22 P)
9-Feb-06 36.35 36.92 36.05 36.29 446,600
8-Feb-06 36.5 36.5 35.6 35.98 383,000
7-Feb-06 35.85 36.81 35.2 35.6 1,211,400
6-Feb-06 32.95 34.34 32.82 34.34 416,800
3-Feb-06 31.8 32.5 31.66 32.49 157,800
2-Feb-06 32.2 32.2 31.55 31.65 219,500
1-Feb-06 32.28 32.33 31.75 32 137,900
31-Jan-06 32.15 32.5 31.87 32.06 179,100
30-Jan-06 31.68 32.36 31.55 32.05 276,300
27-Jan-06 31.38 31.8 31.34 31.75 119,000
26-Jan-06 31.66 31.94 31.04 31.38 181,800
25-Jan-06 31.95 31.95 31.01 31.56 263,500 (buy 31.56)

AIC- Buy 7 days out on first day up after down trend.
Date Open High Low Close Volume
3-Jan-06 6.46 6.53 6.26 6.42 513,400
30-Dec-05 6.48 6.48 6.35 6.46 457,700
29-Dec-05 6.55 6.62 6.5 6.51 549,200
28-Dec-05 6.42 6.56 6.33 6.56 552,000 (short max $0.09 P)
28-Dec-05 $ 0.34 Dividend
27-Dec-05 6.7 6.85 6.57 6.75 287,000 (sell 6.75= 0.94P)
23-Dec-05 6.49 6.73 6.49 6.69 168,000
22-Dec-05 6.36 6.48 6.3 6.45 159,200
21-Dec-05 6.25 6.34 6.23 6.31 393,300
20-Dec-05 6.1 6.23 6.07 6.23 377,600
19-Dec-05 6.13 6.34 6.1 6.12 305,100
16-Dec-05 5.86 6.1 5.85 6.1 740,400
15-Dec-05 5.67 5.82 5.6 5.81 1,460,700 (buy 5.81)
14-Dec-05 5.71 5.76 5.58 5.65 881,400
13-Dec-05 5.74 5.87 5.67 5.69 467,200
12-Dec-05 5.95 5.95 5.75 5.75 329,400
9-Dec-05 5.92 6 5.85 5.88 237,400
8-Dec-05 6.01 6.03 5.88 5.94 222,200
7-Dec-05 5.99 6.03 5.88 5.94 240,400

Thursday, March 16, 2006

Who are you trading against?

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Is it man or machine?
Just a reminder, there are a ton of automated systems, particulary when a MA crossover occurs, or with some of the advanced systems, when a Fib level is broken or the ticks or trin hit extremes, or there is a disrepency in the fair value of either the stocks in the index or the future contract.

Ways to make money in the market.

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Other choices are actively watching stocks that are very volatile with 5-10% swings intraday on average. I can buy any point and have a 50% chance of 1% for the day. Buy low sell high. Screw arbitrage and looking for 1-5 second discrepancy opportunities for a measley profit, that's a full time job, plus I need an extra 500k an advanced software. You can write out the money puts if you got deep pockets. You can pump small caps. Just don't go buying futures options.

So here's your options to making money in the market:
1.Buy an ETF that tracks a major index.(small cap or Russell 2000 is a good choice)
2.Buy a stock with a high dividend yeild and hold it.(PVX is a good oil company with 11% yeild)
3.Learn how to trade futures and scalp 5-10pts at a time looking for 50pts a day.(on YM)
4.Daytrade/Swing trade small cap volatile stocks.(like biotechs: NVAX,AVII,GNTA,INSM)
5.Day trade high priced volatile stocks with tight spreads.(GOOG is awesome for day trading, but make sure you set your stops, if news pops out, you can be screwed real fast).
6.Use option calendar spreads and make a fair amount each month selling puts and calls that are covered.

Market Internals

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If you don't use market internals, you may suffer internal damage to your account. If you trade the index futures or their ETF's, you must master market internals to know the direction of the market and to never trade against it. Next step is tape reading. Next step is knowing where the pivot points or points of support and resistance are and looking for trend line breaks. Then you must incorporate statistical knowledge into your trading by knowing the avg daily range in price. Also you must look at morning gaps that have a high likely hood of being filled. You need to place key pivot points from the previous days trading and also set fib retracements if it looks like you've reached a reversal after a good run.

Do you know what direction to trade when the Trin is 0.5 or 2.0?
Do you know what direction to trade when the Tick just gave a reading of +1000?
Do you know what direction to trade when the put call ratio is 0.6 or 1.0?
Do you know what direction to trade when the up volume is 2x greater than down volume?

Thursday, March 09, 2006

Trade automation

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I've been setting up my ideal trading system and it consists of 1 minute time charts on a 2-4 hr chart with signal for entry and exits based off of moving average crossovers(EMA 7 and T-3 14,0.5) Also I've put in fisher transform, RSI, and MACD for extra confirmation on the trades.

The best vehicles to drive right now appear to be SOXX options and NDX, which move more than YM and ES, the only downside is the liquidity.

Saturday, March 04, 2006

Watching for pullback on DJI to 10900 in next week

0 comments
Use Time and sales, pivots, pit noise, Moving averages, MACD, trend lines and discipline.

Sunday, February 26, 2006

keys to the trade

1 comments
When you watch the screen day in and day out you recognize a pattern of support and resistance zones which are tested and then finally broke through. A good way is to set up your chart with pivot points which tell you if the support or resistance has been broken and where the new objective for the next support and resistance zone is. You can use Fib retractement when you believe the equity has reached a top and also by checking this with a stop or decrease and momentum and the equity has already passed one of the support and resistance zones and may be getting ready for a pullback of atleast 38% and for a complete reversal if the 61.8% line is broken. The reason these zones work is beacuse the professional traders and pit traders will put set stop losses on there trades and if the equity moves to this point then they all sell and then momentum comes in from the price going higher/lower by even more stop losses being triggered until finally a pivot point is reached and profit takers begin to get there 10-20pts from the breakout which sets up for a fib retractment of 38% almost always when the trend is at its near end and the equity has already moved a large percentage in one direction when compared to the average price distance it moves in one direction for short term intraday swings..

Friday, February 24, 2006

Reflecting on past trade from jan 31

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Upon further anaylsis of this trading day, I would have been better off setting an order with a defined stop loss in place and a target of 5-10 pts and if I was playing 2 cards I would let the other one ride for the potential 30-100pt run if I were live trading.

At my current stage I am trading intraday live on the YM with the tick, trin, dow volatility index (DJX), and using trend lines, CCI, momentum, MA's for longer term, fisher transform, chaikin money flow, woodies pivots, neak line break. In the future I look to getting a squack box, and backtesting some strategies using tradestation or wealthlab.

I'm going to put most of my equity in goverrnment bonds to accrue interest and all the while trade using this as my margin requirement, which is pretty cool. Also going to do some credit card arbitrage as described by my money blog by opening a line with Citi on a 0% APR BT and purchase line,,,it'll be great if I can get at least 5k to sock up in some govies or a high yeild savings account.

The best dam Charting software I've seen for free is www.quotetracker.com's product. Jerry MedVed designed it, and his cutomer service and upgrades to the software is awesome.
I'm going to learn how to use the paintbar to use with my own designed indicator in the future, but I may have brush up on learning code for the complex stuff.

Indicators help to confirm a trade, but price trumps all. When trading index futures the most important thing I use are trading support and resistance zones (aka pivot points and some people use woodies pivots, pivots can be calculated by h+l+C+C/4 and then you derive the high and low for the next day using this mean for your deviation number , but the best zones use the opening price plus yesterdays H and low and close, woodies uses h + L + O + O /4) , trend lines, tick, trin, put/call ratio, volatility index, past history of the price, and most importantly the NEWS.

What is the easiest to trade? Things with a trend, and those things are bonds, commodities, currencies, indices, and lastly stocks. Take a look at the weekly of the 2 year gov bond, or how about silvers nice climb nice run or the peso.

Wednesday, February 22, 2006

If not indicators, then what?

0 comments
Some say chart patterns don't matter and that the patterns are just as likely from occuring by flipping a coin. Some say that there are no holy grail indicators. Some say there is no way of knowing what way the market is going to go. Fine. Don't use any of that. Then what are you going to use. Your answer is the news and has always been the news and will forever be the news. Plain and simple example, the terrorists attack the U.S. september 11....should you go long or short...hmmm,,,short,,why?,,because we are under attack and freaking out,,thats why!
Example 2: Oil production has slowed and supply next quarter will be lower by 50 million barrels,,,,hmmm,,,,last time oil went up the DOW went down,,,,so we short the Dow and go long the oil contract. Example 3: Biotech company Novavax says they have a way to beat the scary bird flue virus which could kill millions,,,,hmmm,,,,the stock is at $1,,,,I'm going to buy,,,Oh look, its $3,,,$5,,,,ok back down to $4,,,not to bad. Biotech company will release news on there FDA approval,,,,its approved,,,,,dam,,wish I would have bought, or good thing I didn't buy,,,,how about trading the competitor biotech firm the other direction,,,like INSMED and TARCEVA.

Moral of the story,,News trumps all at affecting the markets. If not news, then technicals and institutions with deep pockets are moving the market the way they want it.

Monday, February 13, 2006

Volatile trading instruements

0 comments
If you have alot time, then trade futures. If you don't have a lot of time, and you are prone to getting stopped out when a trade does indeed go your way or sometimes you get scared out of the trade from too much heat, then why not options?

Good option vehicles are in the form of high priced stocks which are volatile and liquid such as GOOG, PD, and CME.

Options that follow indices are even better, such as DIA, SPY, and QQQQ being the most volatile.

Options on futures have larger spreads, but they too are a choice, such as YM, ES, ER2, and NQ.

Here's a list of the active ETF's which you can trade options on: http://finance.yahoo.com/etf/browser/tv


Also, you can trade volatily, trading CBOE's product VIX, which follows the DJI volatility and acts as a contrarion indicator or the inverse of how the DJI moves, however, these options are European style, and the VIX futures are illiquid.

Saturday, February 11, 2006

Use the news

0 comments
You can use the news to help you trade different setups. For the futures, you can get the pit noise and the broadcaster giving the play by play before you even see the quotes on the T&S. Use www.tradethenews.com. You need to do your homework for the trade before the open. Identify current trend and S and R zones. Know what news is pending and be ready to react. Get a traders calendar. You can use Camtasia Studio to record live trading to analyze where you would place your trades in case you couldn't watch for the paticular day.

Friday, February 03, 2006

Dow play by play

0 comments
Here is todays play by play for the last hour trading:
free stock charts from ADVFN.COM

Entry signals

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First determine where the index stands relative to the 5 and 1 years chart. Then Check out the 6 and 1 month. Then check out the weekly and determine where the support and resistance are. Draw your trend lines on the 1 year, 3 month and 1 week................
This is a good way to get into the correct mindset, but what happened in the past doesn't always predict the future. When day trading, were looking for 3-20 pts and if were lucky 60-120pts. Using tech signals like CCI, fast stochastics, Heinken-Ashi chart, momentum, volume, support and resistance zones, and trend lines.

Here is the yearly analysis:





Tuesday, January 31, 2006

TRADING FOMC DAYS

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Jan 31 2006
I played the YM's off of the fed rate decision, it bounced up quickly from shorts covering followed by a massive sell off even into the AH catalyzed by GOOG missing estimates.
I was +$250 before the announcement, and I was short at 108920, I waited threw some heat, all the way up to 10940, and then it started to decline as expected. I should have shorted once it came over the top, but I was feeling the heat so I decided to sell just under 10920 for a small profit, then the stock made a blip for a second off my cover and then it decided to drop another 60 points to the close and then another 20 points into the after hours. I was holding 2 cards at 10920, If I would have held to 10860, that would've been 60 points or $600...Well the stock slowed at the close, and I thought it was oversold, but I was hesistant to buy, but I took the risk, and it didn't happen, it dropped 40 points on me and I lost $200 from not keeping my stop loss. If I started out flat before the buy, I would have sold for the loss sooner, but I made some money, so I didn't feel as bad when I gave it back, so I allowed a larger loss to try to wait out the heat, but it got to much for me, and I sold for the 40pt loss, it turns out it dropped another 20pts afterwards, good thing I finally got a clue to the trend. I knew the trend, but I wanted a pop to sell at a lower loss, but it never happened. As soon as I sold, I shorted and made back another $20. The next day the YM went to 10985,,,,85pts above my 10900,,,,CRAP......
I will put together my analysis of the YM's and master it,,,using day ranges, key events, support/resistance, earnings annoucements, pumps/dumps, trend analysis, economy, market sentiment, oil price, war situation, and trade on the trend.

RULES:

Keep a stop loss, Keep a stop loss, Keep a stop loss.
LET PROFITS RUN!!!
TRADE THE TREND!!!!!!!!!!
Trail the profit when you have it.
Look for trends by 15-20pts move in one direction, normally 1-2hrs after the open.
Only trade where you are most profitable,,,NEVER AT OPEN OR CLOSE unless there is a trend.
TRADE ONLY TRENDS!!!!!!
If your trade isn't in the green in 1 min, you probably screwed up.

Friday, January 20, 2006

trading in pairs

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Trading without a plan will empty your wallet very fast. With a plan, you can make sure your not screwed as fast as if you didn't have one. When day trading fast moving stocks, use LIMIT orders. Put your order on the same side as the primary trend of the stock and the trend of the markets. Use the tick and trin indicator (tick nyse or trin nyse) for advance/declining issues. PUT IN THE STOP LOSS ORDERS AND LIMIT ORDERS IMMEDIATELY! Set up your bracket order defaults for the stock your gonna trade ahead of time. There is too much stuff going on at once to monitor many stocks. Stick with a couple you can make money on and follow them closely. Trade if its got a trend.

Wednesday, January 11, 2006

TRADING STRATEGIES

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Day trading strategies-
Small cap intraday range strategies- Requirements: Stock trades between $1-10. Avg. daily volume 500k+. Intraday price deviation from open must be an avg. of 5%+. The strategy is to know support and resistance zones which keep the trading range intact. You must place your trade on the side of the current trend. You must watch for news during the day. You must study the last sale screen for the previous couple of days to understand how the major players are trading the stock. Look for block trades that are keeping the stock down or driving the stock up. Know how the primary indices are trading. Scan the message boards and get the primary opinion from clearstation, stockta, and stock consultant. Make an estimated price entry, price objective, and a protective stop loss. Calculate the amount of equity you wish to risk and what the commissions will be. Be patient and execute with confidence. Buy into the stock in pieces, not all at once. If your initial guess was right, and your trade is following the trend, buy some more. As you start to reach your price objective, start to sell some of your holdings, and then when you have decided there is a reversal, sell what you have left.

Tuesday, January 10, 2006

TRADING RULES

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Stock Trading Rules-

Only trade when you have an attainable goal and a stock setup with a plan.
Always use a protective stop loss, and never move your stop loss away, only tighten.
The closer you get to your days profit goal, tighten your trailing stop.
If you are wrong about your trade, get out, and don’t re-enter until you’ve re-evaluated why you were wrong.
Never execute a trade without 100% confidence in your stock setup.
Never trade on margin until you know WTF your doing.
Keep a journal of all your trades to review your strengths and weakness'.
Categorize the type of trades you do best in and worst in.
Don’t trade until your system has proved successful through paper trading first.
Keep track of how many hours a day and week you spend studying the market.

THE GAME PLAN

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Long term view of stock-
Stock Name:
Stock symbol:
What market it trades on:
What the company does:
Why would john doe buy into this company:
Why would john doe sell into this company:
Market Cap:
Short ratio this month:
Short ratio last month:
Short ration trend:
General Fundamentals:
P/E:
News:
Pending news:
Primary long term trend:
Intermediate trend:
Short term trend (up/down/sideways):
Long term Average Volume:
Short term Average Volume:
Dow S/P Index primary trend:
Current Price:
Moving Average:
Long term Average trading range:
Short term Average trading range:
Overbought/Oversold:
Long term Support levels:
Short term Resistance levels:
Average price deviation from open:
Average % deviation from open:

Day trading stock setup-
8 day trend:
8 day High/Low:
8 day MA:
8 day Volume trend:
8 day chart trend:
Yesterdays OHLC:
Yesterdays price movement pre-market/market/after hours:
This mornings pre-market price movement:
Real time market depth:
Block orders on up/down ticks:
Message board activity:
Clearstation buy/sell opinion:
News within the last 5 days:
Pending events or news:
Trading style to be used based on analysis:
Reason for Entry:
Initial Stop loss price:
Target price:
Estimated entry point:
Estimated Exit point:
Amount of Equity to risk:
% of total equity being risked:
Estimated commision:

Stock trading results-
Stock Symbol:
Results W/L/draw:
Time/Date trade executed:
Long/Short:
Share quantity:
Share dollar value:
Bought price:
Sold price:
Time/Date of closing position:
Reason for sell/cover:
Commission:
Gross income:
Net income:

Trading is not that complicated

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No matter what the stock, once a bullish trend is initiated at moderate growth, you have a high probability that trend will continue. Don't be afraid to jump on board the next day, because most trends perpetuate. You may want to look for the low the next day and make sure the trend is moving in your direction by making sure there are higher highs or higher lows or even best, both. If the stock climbs too fast in one day, like 15+% for small caps, 8+% for mid caps, and 4+% for large caps, you should keep a tighter stop loss and watch for a slow in volume and resistance areas which could trigger the stock to drop drastically away from you.

Trade highly volatile range plays with small percentages of total capital, or trade less volatile range plays with a great deal of equity on the line and use tight stop losses on both trades.

Use case studies to learn from. For example, bird flu hype and the appearence of NVAX CEO on CNBC made the stock go vertical 30+% in one day.

Follow what happens to the stocks Cramer pumps, what happens after the key event or catalyst, and how long does it take for a dump. Cramer can make a stock move 5-10% AH and the stock moves even more the following day. It must be nice to be Cramer, you can pump any stock you want without getting into fundamentals, just blabbering about how its a hot stock and he instantly gets 5-10% on whatever he taughts.

Read the tape, follow the block trades, look for momentum.

Follow crazy percent gainers for the day and how long they take before they return to pre-event levels.

Edu-Caution

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Trading is like science. There are four keys to being a scientist and discovering something.

1. Make an observation that you find to be of interest.
2. Formulate a hypothesis about that observation.
3. Test your hypothesis.
4. Draw conclusions from your hypothesis, refine it, and repeat the expirement until your hypothesis proves statistically valid and can then be formed into a theory.

Stock examples:

1. stock X has been trading between $35-40 for the last month and the market is bullish.
2. If I buy the stock around $35 and wait it should go up to around $40.
3. You buy the stock at $36 and you wait and it goes to $38.
4. You were right about the hypothesis, and you repeat your experiment 100x and you were right 75% of the time making your hypothesis statistically valid.

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