Quick Post - I don’t know how I came to believe that FMOC interest rate announcement was today, but it is not. Come to think about it, I sometimes don’t know what planet I’m on. My mistake may have caused me to miss my entry window on some of my trades… I will know tonight.
Lesson Learned – Get Your Facts Right!
Cheers - David
Thursday, November 16, 2006
Watch List
There are a number of stocks that I have on my watch list that are giving me buy signals (both bullish and bearish) that I have been waiting for. The include ARE, BSC, CMI, GS, MTW, PFE. However, today is not a day for me to enter any trades since it is the FED anouncement day. I have been burned on the last two and promised myself to wait until afterwards. The problem for me is not the anoucement it's self, but my in ability to react prior to the market close. AGN, FTI, FCX, MRO are also on my 'Pending' Watchlist.
I am still in my COF trade - I am watching it closely.
Cheers - David
I am still in my COF trade - I am watching it closely.
Cheers - David
Friday, November 10, 2006
New trade - COF
I entered into a COF Jan 07 80 Put position for $5.60 on 11/2/06. The stock had been on my set-up watch list since mid October 2006 when it retested the 200dma. The stock originally came to my attention when reading Tim Knights blog. I liked what I saw and added it t my list.
I was patiently waiting for the stock to give me a cross over signal on the STO (occurred on 10/27) and MACD (occurred on 10/30), and a breakdown below the 21dma on high volume (occurred on 10/31). For some reason, I did not look at the COF chart on 10/31 (missing the final buy signal) and 11/1 ( a 2nd high volume down day). I entered the following day. On the day of entry, it took me an hour to pull the trigger which facilitated me buying my put at the bottom for the day (a bit late, don’t you think!!!)… A contingent stop order was set at 79.00 based on resistance and allowable loss for a trade.
Look at how the trade is currently progressing, my indicators are showing that a short term reversal maybe on the way, however, I am going to see if the 50dma holds as resistance.
Lessons Learned on this trade so far:
1. Get over yourself and just pull the trigger. Trust your analysis and follow through
2. Check your watch lists daily. Looking at this trade, the stock had already moved 5-8% before entry.
Cheers - David
Tuesday, November 07, 2006
Back online!
2 months have passed since my last post. My world has been upside down getting use to having a new little one in the house, but things are getting better. I must say that having a child is one of the greatest experiences one can have. I see that one of my life’s future achievements will be to watch my kids (one so far) grow up and some day have a life and kids of their own.
As for trading, it has taken some time to get back into the mix. I paper traded for the month of October with some mixed results. I found that my winning trades outnumbered my loosing trades but my results were inconsistent. After reviewing these trades, I found that my results were inconsistent for the following reasons:
1. Entering the trade in anticipation of a price move (that obviously did not occur) – This caused me the biggest dollar loss in 2 trades – What a big waste of money!!!
2. Entering the trade too late – Chasing a trade that had already made its move.
3. Not exiting a trade when I was happy with the gain or my indicators were showing an imminent short term reversal - I think that I missed about 30% additional across the board profits because if this.
4. Mistakes – Being too hasty with my analysis and entering a trade based on what I wanted to see, not what the chart was telling me.
5. Staying in a loosing trade too long when the stock moves against my position - This is a tough one. I like to set my stops above support and resistance which means that my stop could be a couple of dollars above my entry point. As it relates to my option trading, I could loose half of the contract value before being kicked out. OUCH! If I am going to trade support and resistance, I need to work on the timing of my entries
6. NOT TRUSTING MY ANALYSIS & HESITATING TRADE ENTRY – This is my killer. I entered late and missed some nice price moved because of this (number 2 occurs). Overcoming my own fears is the only solution.
Cheers - David
As for trading, it has taken some time to get back into the mix. I paper traded for the month of October with some mixed results. I found that my winning trades outnumbered my loosing trades but my results were inconsistent. After reviewing these trades, I found that my results were inconsistent for the following reasons:
1. Entering the trade in anticipation of a price move (that obviously did not occur) – This caused me the biggest dollar loss in 2 trades – What a big waste of money!!!
2. Entering the trade too late – Chasing a trade that had already made its move.
3. Not exiting a trade when I was happy with the gain or my indicators were showing an imminent short term reversal - I think that I missed about 30% additional across the board profits because if this.
4. Mistakes – Being too hasty with my analysis and entering a trade based on what I wanted to see, not what the chart was telling me.
5. Staying in a loosing trade too long when the stock moves against my position - This is a tough one. I like to set my stops above support and resistance which means that my stop could be a couple of dollars above my entry point. As it relates to my option trading, I could loose half of the contract value before being kicked out. OUCH! If I am going to trade support and resistance, I need to work on the timing of my entries
6. NOT TRUSTING MY ANALYSIS & HESITATING TRADE ENTRY – This is my killer. I entered late and missed some nice price moved because of this (number 2 occurs). Overcoming my own fears is the only solution.
Cheers - David
Friday, September 08, 2006
Been Hiding ... Haven't I
My wife and I have a little girl due in the next day or so, so trading has been the most distant thing from my mind lately… Things are crazy… Wife is hormonal… We are both freaking out because we have no idea what to expect…. Ahhhhhh!
As for the trades I entered some weeks ago. I must say it was a disappointing effort on my behalf. I had made a nice gain on the trades prior to the last announcement, but failed to follow my own lessons learned and exit the day prior to the announcement… Market rallied, stopped out with an OK gain on the majority of the trades, but took a 7% hit on the GS trade. Not good.
Anyway, I need to pay better attention to what I am doing.
Good luck and best wishes to you.
Thanks - David
As for the trades I entered some weeks ago. I must say it was a disappointing effort on my behalf. I had made a nice gain on the trades prior to the last announcement, but failed to follow my own lessons learned and exit the day prior to the announcement… Market rallied, stopped out with an OK gain on the majority of the trades, but took a 7% hit on the GS trade. Not good.
Anyway, I need to pay better attention to what I am doing.
Good luck and best wishes to you.
Thanks - David
Monday, August 14, 2006
Nerve Racking Experience
Lately, I have been trying to comprehend and control my hopes and fears of losing money. Although most of the anxiety was psychological, some of the severe anxiety I experienced actually manifested physically, i.e. pain at the back of the head, sweats and shakes. I was obsessed with every stock tick of every trade that I was in. While it is natural to not want to lose money, I seriously had a problem.
At the time of my last post, my excuse for not wanting to enter a live trade was that I was waiting for the FED announcement. The announcement came and went (what an over rated experience that was) and I hadn’t entered a trade. It took until the 10th before I was able to muster up the courage. The first few days were bad, I had been in the red (only a few hundred dollars, but in the red all the same!). While I drove to work today the DOW gapped up 60+ at open. This put me in an instant state of anxiety. I was invested in some option put trades and thought that all my fears had been realized and that I had just lost a substantial amount of money. When I looked at my account I found that both my hopes and fears were being realized at the same time. While two of the trades pushed deeper into the red, two others were performing well, putting my account into a positive position! I did not expect this.
I am reading ‘The Coming Economic Collapse” by Stephen Leeb at the moment. On page 58, he quotes Jesse Livermore (Edwin Lefevre’s Reminiscence if a Stock Operator):
“It is inseparable from human nature to hope and fear. In speculation when the market goes against you, you hope that every day will be the last day-and you lose more than you should had you not listened to hope-to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out-too soon. The successful trader has to fight these two deep seated instincts”.
While I cannot say that I am cured of my problem, I have reached a turning point in both my ability and attitude towards trading. Hope and fear will always be there, but I have started taking steps to manage and control these powerful forces.
Based on this learning experience I am training myself to think differently… My thinking should not be ‘how much will I gain today, it should be along the lines of ‘how much will I lose today’. I have come to learn that losing money is a part of trading and I MUST accept it if I am going to succeed. I need to accept loses and move on. The only caveat is that I need to make sure that my winning trades are greater than my losing trades.
_________________________________
Below is a screenshot of my current trades (live). As noted above, I entered these trades on 8/10/06. I have contingent stops in place for each. I will not go into detail about the stops at the moment, because depending on PPI and CPI announcements over the next two days, I may chose to tighten them BMO tomorrow.
At the time of my last post, my excuse for not wanting to enter a live trade was that I was waiting for the FED announcement. The announcement came and went (what an over rated experience that was) and I hadn’t entered a trade. It took until the 10th before I was able to muster up the courage. The first few days were bad, I had been in the red (only a few hundred dollars, but in the red all the same!). While I drove to work today the DOW gapped up 60+ at open. This put me in an instant state of anxiety. I was invested in some option put trades and thought that all my fears had been realized and that I had just lost a substantial amount of money. When I looked at my account I found that both my hopes and fears were being realized at the same time. While two of the trades pushed deeper into the red, two others were performing well, putting my account into a positive position! I did not expect this.
I am reading ‘The Coming Economic Collapse” by Stephen Leeb at the moment. On page 58, he quotes Jesse Livermore (Edwin Lefevre’s Reminiscence if a Stock Operator):
“It is inseparable from human nature to hope and fear. In speculation when the market goes against you, you hope that every day will be the last day-and you lose more than you should had you not listened to hope-to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out-too soon. The successful trader has to fight these two deep seated instincts”.
While I cannot say that I am cured of my problem, I have reached a turning point in both my ability and attitude towards trading. Hope and fear will always be there, but I have started taking steps to manage and control these powerful forces.
Based on this learning experience I am training myself to think differently… My thinking should not be ‘how much will I gain today, it should be along the lines of ‘how much will I lose today’. I have come to learn that losing money is a part of trading and I MUST accept it if I am going to succeed. I need to accept loses and move on. The only caveat is that I need to make sure that my winning trades are greater than my losing trades.
_________________________________
Below is a screenshot of my current trades (live). As noted above, I entered these trades on 8/10/06. I have contingent stops in place for each. I will not go into detail about the stops at the moment, because depending on PPI and CPI announcements over the next two days, I may chose to tighten them BMO tomorrow.
Monday, August 07, 2006
About Time!
It has been about a week and a half since my last posting. There has been no real reason for this other than being short of a little time (while I finish up remodeling my house and preparing for the birth of my first child at the end of the month!) and waiting for the damn obsessive FED announcement on Tuesday. I have managed to get on line and look at each day’s action, but finding the time to make a post have been difficult. I need to work on that.
On the last post, I said that I have been waiting for the market to tell me which way it is going to go. Revisiting the DOW chart that was also posted, we can see that it has completed its move to the drawn resistance line. On Thursday, the index broke through resistance to close just above. On Friday, It surged +100 points to a new high, it then dropped around -150 points to make the session low and then rose approx +50 points to closed just above resistance. What a couple of days!
$INDU 60d/60m chart
On the last post, I said that I have been waiting for the market to tell me which way it is going to go. Revisiting the DOW chart that was also posted, we can see that it has completed its move to the drawn resistance line. On Thursday, the index broke through resistance to close just above. On Friday, It surged +100 points to a new high, it then dropped around -150 points to make the session low and then rose approx +50 points to closed just above resistance. What a couple of days!
$INDU 60d/60m chart
Looking at the chart, Volume appears to have been gradually rising over the last ½ a month. My Sto and MACD look to be getting ready to tip, RSI appears to be increasing and OBV downwards. The unknown – What the FED is going to say and how the market will react.
In my mind, The DOW has completed this leg up, but the index still does not give me any clear indication as to what to do. I wan to buy some select puts, but I remain cautious until tomorrow. My expectation is that it will make another leg down after the FED announcement. Based on what I have been reading in the news media and on other blogs, the economic outlook is bleak and there is little reason for the market to rally.
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As for current trades, I still have the QCOM strangle. I added some DIA Puts last week. I am looking at entering a number of new trades after Tuesday.
Good Luck - David
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