riding the noise

Full Time

2009-05-22T16:52:00.001-07:00

I'd put my overall trading today in the crap pile. But there were moments when things were good and my skills showed some development. I made $20 in my account and $611 in my friend's account.

First, I think working the two accounts at once will keep my mind on trading, prevent me from overtrading my account, and allow me to make a little extra money overall. It would've worked brilliantly today, had I not placed my first trade without looking at anything other than a small portion of a 10 minute chart. I went long right out of the open (only in my account) and didn't realize the implications for a few minutes while my other computer booted up. I took a hit right off the bat (aside: talk about word play). I didn't know how far the drop would be so I took a $300 or so loss just to keep my mind at ease. Didn't want to break my account today.

Anyway, I use the other computer to run IB's platform which gives me $TICK readings, stock quotes, etc. After that booted up I began to trade my friend's account too. This kept me much more focused on the game, although it took me quite a bit of time to work off that initial loss, mostly because I would get scared of my initial perceptions. There was a lot of second guessing that probably didn't need to happen.

By the end of the day, his account, which allows me to trade up to 6 contracts (but I maxed at 2 today) was up quite nicely. My own account may have finished up better if I had left on the short I put in at 994 for a little longer than 1.5 points. The closings make me a little nervous given I can only day trade that account, so I tend to get out as close to 3:30EST as I can.

Overall the screw up at the beginning of the day contributed to a fear throughout. Because of this I took many winning trades off too soon and cut some trades at breakeven that should've been allowed some more time.

Monday is a holiday, but I will be back for more next Tuesday through Friday.

Take care.

Patterns

2009-05-22T06:23:00.000-07:00

xkcd

STUPID!

2009-05-20T08:59:00.000-07:00

New Rule: Do not take on two contracts at once until $2500+ is in the account. Even then, be cautious and do not take them on after a losing trade. STUPID!

53.7%+ Booyah Wall St!

2009-05-19T19:32:00.001-07:00

I opened my own futures account last week. I've put in four trading days and have made $537.70 or 53.7% on my original $1000 deposit. I've only been able to trade a single contract up until today when I surpassed the $1.4k mark (each contract requires $703 in the account). Made ~4.5 points after commission today; I had no school today and stayed in front of the computer from 6:30-12:30ish (9:30-3:30EST).

Last night I came up with a trading plan (rather simple) that I have implemented. Also, I maintain extreme caution with all my trades (many have been for a measly tick, but this does allow me to reduce stress by keeping losing trades to a very, very small fraction of total trades)

Current trading plan (tried to order them by importance):

protect profits
increase equity
build buffer room for margin
expand contract size slowly
maintain account size until:
1)$5k is reached
2)need money for rent/school (heh)
3)no other reasons!
continue to learn

Ain't Got Nuthin'

2009-05-18T21:01:00.000-07:00

Oh! Sweet Nuthin' - The Velvet Underground

Not much for you at the moment. Added a few links to "Comrades in the Trenches." Also, I have been trading my own futures account for three days now. Can't wait for the summer so I can trade full time =)

Anyway, hope all's going well. These markets love making winners out of losers and vice versa. Hold onto your shirts. Don't fold your aces. But remember, two two's likely won't stand, and three pairs makes a winner out of no one =D.

Frightening

2009-05-16T19:39:00.000-07:00

Two Things

2009-05-09T16:00:00.000-07:00

Update: Another you might want to look at as well.

Ridiculous

2009-05-07T16:57:00.001-07:00

I know this may look a little ridiculous, but if you take a close look, you'll find 100% positive trade execution. It's a little scary, really:

That's $78.90 in twenty minutes using Level II quotes on the /ES future. I'm not saying it will always work that well (I waited for a considerable amount of bids to build up before going long, or a large number of asks to go short), or that the number of trades is not outrageous (IB must be loving me). But I'm going to begin using it to increase my edge a little bit more. Works great in afterhours. Hope it works well during the day too.

PS: I know I'm supposed to be taking care of things outside of trading, but Jules cheated, so I will too.

Offline For A While

2009-05-05T15:44:00.001-07:00

Taking a break from the blog for a while. There are quite a few things that need my attention offline.

Take care everyone.

Impatience

2009-05-03T19:46:00.000-07:00

Lost $500 on Friday because I was impatient and pushed a trade (oh, and IB's platform also did something funny). I was up $300 with the market rather quiet. I hate the fact that I can only trade on Monday, Wednesday, and Fridays, and dislike it even more when I don't feel as though I've had a full trading day one of those days. That day tends to be Friday, as I like to be out before the end of the day. Overnight-weekend holds are no fun.

Anyway, I told myself I should get out, but I really wanted to break 25k. That was bad on two counts. One, I didn't listen to my intuition. Two, I was focusing on profit figures when I should have been focusing on setups. I threw on a trade to short far too much SRS and ended up taking a $500 loss.

Of course, that would leave me down just $200. But I decided to try to make it back with futures. I did okay (up $50 or so) when I tried to close out my positions and turn off my program. Something weird happened and one window was saying I had no positions while another said I had a position in /ES. Also, my P/L column said I had lost $100k or something ridiculous (IB would never let that happen...heh).

I had to turn the program off to get it to do anything. When I came back on, I (somehow) had a short position in /ES. I thought I'd let it run a little to see if I could make any of the losses that I had on it back. I couldn't and had to take a $300 loss. Bleh!

My impatience got the best of me. Again.

Plastic

2009-04-30T18:23:00.000-07:00

Not sure exactly what it means (could be the pole of a consolidation bull flag, or it could be a shooting star) but the formation is interesting, especially with the amount of volume. Something to note, which causes me to lean toward bull flag, is that the weekly chart shows a big up candle. Doesn't mean it will be able to hold, but it makes me cautious.

Will Save Us All

2009-04-30T15:48:00.000-07:00

I stopped by Barnes and Noble on the way home today. I traveled from section to section, stopping here and there. Eventually I found myself in the magazine section, slowly accumulating several periodicals in my hands.

On the way to get myself a seat and to continue my perusal I saw a magazine with something about who stole "our" 401(k)s (our is in quotes because I don't have a 401(k)).

It was Mother Jones.

It caught my attention and I decided to give it a go (who would they condemn? Wall St big wigs, Congress, Bush, short sellers like me). But before I even got to that article I came across something even more attention grabbing in the table of contents. I guess I didn't realize how left-leaning the magazine was, but I was surprised to see it also had an article called "Security Blanket: How Social Security Can Save Us All."

I was stunned. Really? Social Security will save us all?...I wish I could find a copy of it on the internet to analyze and dissect.

I just want to know, Who believes this stuff anymore?

Great/Terrible Day

2009-04-29T13:27:00.000-07:00

Had a neutral day. While I made +$1162 trading stocks, I've lost quite a bit trading forex. I opened the account and did well the first day making 11.8 pips--even had some of it sent to me as a check (for safer keeping). But when I tried making some more trades last night, I got stuck in a trade that turned out to hurt quite a bit. Ended up losing $1300 or so. Made back about $400 around the FOMC meeting trading another pair. I'm currently down about 1200 or so.

I think I'll make it back. I just have to take my time and exercise patience/discipline and realize that I need to get into the "forex groove."

Note to Self

2009-04-28T22:02:00.001-07:00

Don't have any positions on at 2:15 PM EST tomorrow.

Indicators and Sentiment

2009-04-28T07:34:00.000-07:00

In addition to the numerous indicators issuing caution for the bulls, Bloomberg has an article stating U.S. Consumer Confidence Jumped by Most in More Than 3 Years. I'm not saying we've evaded the bear, just that I'd be wary, as I don't want to be stampeded by a bunch of excited bulls.

Heroes

2009-04-28T07:17:00.000-07:00

Oh, I love you David Bowie.

We can beat them, forever and ever.
Oh, we can be heroes, just for one day.

Looking Out

2009-04-27T18:00:00.000-07:00

We formed a shooting star on the daily SPY chart. Whether this signals more indecision or continued reversal is beyond me. The volume was lighter than I would have preferred. If you take a look at XLF, I think you'll be surprised with the relatively low volume there. Not sure that means anything. Could be the lack of significant economic activity or that a good portion of traders are coming down with the swine flu. I'll go with the former, but the later would certainly make an interesting story.

I'd keep an eye out for The Housing Time Bomb's continued analysis of the bond markets. I think the ten year will have a strong effect on this market. Remember, the Fed bought up a lot of bonds trying to lower interest rates in order to encourage the mortgage markets. Not sure if that worked at all, but it definitely won't work if interest rates substantially increase.

I'm also keeping an eye on the EUR/USD pair. Mostly because I hope to trade it soon (I set up a standard forex account that should hopefully be funded by this time tomorrow), but also because I think a weaker dollar spurs investment in equities as foreigners can get more for their money. I'm not sure how correlated this is, but I'll keep to my funny idea at the moment.

What else is going on? Looks like some important economic news will be released this week. I'd watch out for anything that might be twisted or turned leading to upward or downward motion. It's never fun to get caught in news-driven madness.

Another Good Day

2009-04-27T13:02:00.000-07:00

Another really good day. I traded a little SRS and some ES for a +$723 gain. I have quite a bit to write, but I need to take a break for the moment (and finish some errands); but, I decided to trade longer than I have in the past. This works well, especially, on good days (kind of like letting your winners run, I suppose).

More to come this evening (I do live on the west coast, so it's afternoon here).

Cheers and the best of luck to all of you.

The WTF Hour.

2009-04-26T07:11:00.000-07:00

Interesting piece that may explain why the last hour or so of trading has been so volatile.

Some Music

2009-04-25T09:55:00.000-07:00

All Along the Watchtower - Bob Dylan

Take care this weekend.

Quick Day

2009-04-24T17:29:00.000-07:00

Made +103 on two trades today. I didn't have much time, contemplated leaving the trades on while I did the errands I had to do, but ended up deciding against it and just closing the positions out.

My thinking: Who knew how the stress test info would be received? I wasn't taking that kind of risk again. Breaking above 865 invalidated my head and shoulders proposal, so I was on my toes.

A pretty good week for me.

Take care everyone.

How to be Successful

2009-04-22T20:13:00.000-07:00

Make sure you put in your 10,000 hours.

Black Gold

2009-04-22T17:36:00.000-07:00

Here's the USO daily resting on some support at 26 or so. It's beginning to look like a nice place to begin a small accumulation.

As long as the price remains strong on what looks like a pullback, I'm fairly happy, especially with the low volume. It does not look like the shares that exchanged hands several months ago are frightened by the retrace nor excited by the possibility of further decline.

If we get sustained support at 26 with strong consolidation, I'm bullish. A drop below 26 to somewhere between 22-24 would make me bullish as well. I'm actually thinking about purchasing a handful of shares right around its current price, just to get a feel for its movements, building up a small position as things unfold.

A Hypothesis

2009-04-22T16:35:00.001-07:00

Good Day. Nearly Great.

2009-04-22T13:10:00.000-07:00

Today wasn't too bad. Walked away with a +$1369 gain (after commissions, of course). That covers all the losses I've had in the last two weeks (or so) and then some. The account is now up 10% and the times are good.

I should really stay away from stocks until I can daytrade. I'm just not up for this swing trading nonsense; although, it does appear the S&P500 has set up a nice head and shoulders, as long as it doesn't break above ~865.

EURUSD

2009-04-21T23:18:00.000-07:00

Could be a good entry for a long position. This is on the 4hr chart of the EURUSD pair. Might be setting up for a "W" and a pull back (RSI bottomed out). If not a "W" then maybe a bear flag. Either way, I'd say it is a fairly low risk entry with a target around 1.2975 and stops near lows (I don't set my stops and leave them; I enter and exit as things improve or hurt my advantage...but in general a stop around 1.29 would be good in that if we break below that point I'd be looking for further weakness, not that I think it would be a good idea to enter right now and hold until then and then sell. That'd be a terrible 40pip loss. Way too much for me to stomach.)

Watch and reassess as things move along. Develop the positions. Don't get stuck in them.

Pizza is My Favorite Fruit

2009-04-21T19:34:00.000-07:00

Two things:

first thing

second thing.

I'm off to continue my laziness (i.e. reading far too many blogs). Such is life, and damn is it ~~good~~ ~~bad~~ ~~bearable~~. Hmmm.

One more thing (so three things?). I listen to this while I trade:

(I kid. I kid!)

Lose yourself...

2009-04-19T17:06:00.000-07:00

Lose yourself in the market...

...you'll find more than you expect.

Another Thing

2009-04-15T20:03:00.000-07:00

I am experiencing an allergic reaction to one of the supplements I am taking. It sucks. I have a rash on my arms, face...

But my head feels so much better. Damn. We'll see if I can get by without the Omega3-6-9 pills and survive on the other stuff. Hoping to feel like this for a while. That'd be great.

Without the rash, though.

I know--I'm difficult.

Heh.

Survey

2009-04-15T19:53:00.000-07:00

This is going to be somewhat disconnected and stream of consciousness...my thoughts are somewhat scattered.

I just received an "opinion poll" call that confused the hell out of me. All questions asked were terribly polarizing. Do you classify yourself as Republican or Democrat? Ummm...Neutral? Liberal on social issues, more capitalist, but classically liberal. Anyway, I really don't like parties. Call me a wall flower.

Bleh. And the other questions are so vague: Do you support cutting funding for the needy, mentally ill, blind, etc etc. I really don't know what programs you're talking about. Sounds kinda harsh, but I don't know what kind of funding and what type of programs are being provided. They could be getting unnecessary care. Free tickets to Disneyland and limo rides to work. I really don't know.

How do I feel about California's budget problems? $42b in the hole sounds pretty bad to me. I guess I'd say, fucked? What do you think should be done? Get some competent people in office. Maybe have some sort of experience qualification. Arnold? Get him out. Require citizens to invest in this country. Let's take some of our debt on ourselves. Then maybe we'll start to care.

I really don't have any answers. I just trade and go to school.

Maybe in a few years, but I can guarantee the answers won't be summed up in a sentence. And they probably won't fit into a survey...

Stupid or Not--Tomorrow

2009-04-15T13:05:00.001-07:00

Today's is in the red. Yesterday's is outside it.

As you can see, I lost a lot of money yesterday. What's really frustrating, though, is I could've made quite a bit if I didn't get scared out of my GS position. That bugs me the most.

Today I made three trades, two which I am holding overnight. I left my order to short AZO at 160 on from yesterday. It was executed sometime this morning. I'm holding it for awhile--not quite sure until when, but I want to see if it will likely hit its ~147 gap up. I'll see and at least save myself a day trade. Maybe I'll take a chance for 155 if it retests.

On the futures front, I decided to give myself a "swing" trade on the ES and took it for a five point ride. Not a bad trade for me.

Also, I shorted some JPM at $32. I think it has a good chance of breaking below its 200 day as early as tomorrow. It closed just above it today on okay volume, but I'm not sure if it can hold. XLF had low volume today. Hoping that's a good sign. GS also rebounded on low volume--I'm thinking its price action was it reacting to its 200day MA. Not sure if it will hold.

I'd like to cover JPM around 28 in an ideal world.

I could get my ass handed to me though =)

Some Things to Think About and Work On

2009-04-13T18:42:00.000-07:00

While trading today I kept telling myself that I'm not a position trader, but a trader (a scalper, maybe). I shorted 500 GS at ~129.60 (which I should've shorted at 130, but was greedy). So many things went wrong. I didn't realize that they were going to release earnings tomorrow until I was already in the trade (I should've looked that info up). Two, I didn't realize I couldn't purchase more than 500 shares. I entered 600 originally and was thrown off somewhat, leading me to stumble closer to the ~130 price. Small mistakes, but when I have a single day trade I get all flustered when even small things happen.

Do not day trade unless you can TRADE.

That's going to be my new rule. No more stock trading unless I can trade; otherwise, I'll do some position trading, but with clear stops and without margin.

I made other mistakes too. Sold near the high, which I probably wouldn't have done if I waited for the entry I had wanted. Also, I got into some ES trading near the end of the day and levered up (trying to regain losses from my GS trade, which overwhelmed my margin and prevented me from trading ES earlier) leading to untenable positions. I was synced with GS, not ES...bummer, bummer.

But the good thing is that today's loss was not as damaging to my psyche as my last two big losses. I'm learning to detach as I trade more and more. Also, I am getting to the point where I can point out the good things I do during the day. And I feel good about them. I also point out the poorer things I do, and I don't let them drag me down. They just become areas where I need to work.

Another thing I would like to dedicate some more time to is developing my skills at researching stocks while the market is closed. I'd like to find a set of stocks that I can do well with in a strong market, a weak market, etc, so that I will have some choices and a plan for different market setups.

On a positive note, I am up 4.63 in a micro forex account that began with 4.99. I'm trying to work on expanding my trading to various areas so that if I am not comfortable with one market I can move to another.

I'll post the trades for today later. I closed out of the trading program in order to prevent any impulsive emotional plays and didn't take a screenshot.

Awful...

2009-04-13T12:45:00.000-07:00

Terrible, terrible day in the market.

On a side note, I'm taking some supplements, hopefully they help my depression.

Cradle Trade on the S&P 500?

2009-04-12T22:16:00.001-07:00

Interesting piece by Corey of Afraid to Trade.

I Bite the Head Off First

2009-04-12T10:55:00.000-07:00

Sorry. I like XKCD--probably because I'm a geek. Oh well, that's how it goes. =)

PS: Happy Easter to any of you who celebrate. To those who do not celebrate Easter: take the chocolate bunnies and eggs anyway. They're delicious.

Bleh

2009-04-10T21:40:00.001-07:00

I hate market holidays.

I like Chart of the Day

2009-04-09T19:18:00.000-07:00

No trading today because it is a Thursday. However, I did want to post this interesting chart (I'm beginning to like ChartoftheDay.com):

Also, Fear and Greed Trader is back (added to the side bar here, and h/t goes to Charlie). Check F&G Trader out. I try to mimic his trading style (but am nowhere near his level of success).

Striking Off Another Day

2009-04-08T12:53:00.000-07:00

Made $278.02 today with a 100% (though barely) win rate.

Days left: 94
Status: on schedule

I may have had a green day today, but my trading was terrible. It's weird how that can happen. Sometimes I break even or lose some money and feel I had a great day. Today, I didn't listen to myself, and not only that, but I made some stupid mistakes that really should've bitten me in the ass (but I lucked out). First, that circled trade above was not supposed to be executed. I wasn't thinking and accidentally sold another 100 shares of SRS when I just wanted to put in a buy order at a lower point. I got out with a small profit on it, but the misstep threw me off.

Another thing, I told myself to short SRS at 45. I chased it and got in .20 lower (or $200 below where I wanted). Oh well. I still got out with a profit (albeit, seeing it at ~43.20 right now makes me a little sick...).

The more I trade, the more I realize it does not benefit me to chase prices. If I buy or sell on a pullback, I'm 100% better off. Plus, when you chase stocks, you not only get in at a worse price, but also without a buffer. Say you chase the price, and the price you get in at happens to be the low for the duration you're willing to stay in for--you're kinda screwed. Whereas, if you entered at a higher point anticipating a drop (based on chart pattern, or something else), you have enough room to get out should something go against you (or at least, you will tend to have more room to get out than you would if you had chased the stock--that's how it works for me).

Anyway, I did fairly well with trading ES today. Actually, I'm finding it allows me to play around with other stocks and futures by giving me a little bit of a cushion. I don't feel as threatened when one of my other positions goes into the red if I have some ES profits backing me up. If I didn't have that cushion today (and probably last week when I traded the NQ for the first time), I would've ended in the red, just because I would've cut my losses earlier; I tend to be a lightweight when I'm trading 1k positions. Heh.

Self-Fulfilling Indicators

2009-04-06T19:23:00.000-07:00

Check out Yngvai's newest post on dispelling indicator myths. He does a good job on explaining and dispelling Fibonnaci retracements.

$TICKed Off, In a Good Way

2009-04-06T12:43:00.001-07:00

Today's profit was $287.20.

Days left: 95
Status: on schedule (+/- 0)

I traded the ES and some GS. I looked into GC to trade some gold, but I never got around to it. As you can see from the number of contracts I traded and the measly tick here, point there, I had trouble trading today. The market felt slow and it ranged fairly tight while I traded (SPX = 826-831 for the most part).

I'm getting a little better at recognizing patterns and interpreting price action as things move along. Today I just had a bad time figuring out what was going on, which led me to buy and then second guess. Or sell, and wish I hadn't.

With GS I shorted in with a single trade and eased my way out. I probably could have done it a little better if I hadn't had so much trouble with it in the past. But it looked very strong going into the last half hour, so I took what I could get and decided to let my nerves calm a bit and log off for the day (nearing end of market: looks like I did the right thing; update: well, I guess I was wrong =); such is the market).

I used $TICK here and there, but I mostly just watched price action, volume, and patterns. I had an RSI setup on my SPY chart, but turned it off after a while. Sometimes I just interpret things better without having to not only second guess what I see, but second guess what an indicator "tells" me I see. Bleh.

I'm glad that trading session is over. I'm hoping for some turbulent action come Wednesday; but perhaps, a little practice trading calmer waters is good for me.

Take care everyone.

On Risk

2009-04-04T23:22:00.001-07:00

"If you want a guarantee, buy a toaster." - Clint Eastwood

Fly

2009-04-04T13:06:00.001-07:00

The day I learn to fly, I'm never coming down. - Heaven Knows by Rise Against.

PS: What does everyone think about the rally? Bull? or Bullshit? I'll go with a little mixture. There's too much dumb money in the market for rational moves. That's where the money is to be made.

Secret: Guess and Check

2009-04-04T10:28:00.000-07:00

"Throw lots of things at the wall and see what sticks."

Weekly Cleanup

2009-04-03T13:27:00.000-07:00

All trades were winners today, putting me one day closer to my goal and $276 up.

Days left: 96
Status: on time

I cut out early again to have lunch with my brother (trading from 10:45 AM PST to 12:05 PM PST). I'm trying to maintain a +200/day pace (for the days I can trade) and I don't want to push it to where I get stressed and start making mistakes.

Today I nearly screwed up on the YM. It was my first day trading it, and I thought it may be reversing mid-day. Really, it could've gone either way, but I put in a sell order near a previous high and waited. Then it burst through my entry. While it rallied (and I figured it could go as high as 8k) I held on, watching the S&P500 and the $TICK.

An interesting thing happened with the $TICK today. On its chart, I had a 10-period MA running, to smooth out its volatility. The MA kept a steady upward tilt. Even though I kept thinking to myself that what was happening mid-day was a consolidation, but I wanted to have my order in. If it was, I figured I could get out, as the high would likely be retested (especially with more than an hour and a half left in the market). Basically, the largely positive MA should've alerted me to the bullish bias (which I suppose it did, keeping me on my toes).

That's what happened. I ended up getting out with a modest gain in the YM before it exploded later in the afternoon.

Even though the position of my short entry did not have to be retested, I felt it was likely. I always try to get in near support/resistance for that reason.

Chart of the Day: Recession Durations

2009-04-03T13:25:00.000-07:00

Chart of the Day (link goes to today's) is a pretty cool idea. I just wish they had a free one more than once a week.

Chia Obama?

2009-04-02T16:13:00.000-07:00

I don't know why google linked me to an Obama Chia pet, but it did:

Also, the 200-day MA on GS did act like resistance today. Wish I were home (and had a day trade left).

Entertainment, Uptick, XLF and a 200-day

2009-04-01T21:59:00.000-07:00

Here's a link to the full episode of the South Park bailout episode. I liked it. Check it out if you have some time for a little frivolous entertainment.

Today ended on an "uptick"--in a sense. Looking at the XLF, volume doesn't look very healthy in the financial sector. JPM's volume, on the other hand, isn't too shabby. If you pull up the GS chart, I think you'll like what you see. It's coming up to its 200-day MA (or its 200-day MA is coming down to it...). I'm thinking about shorting around 115.50 or so if it manages to get there.

Shorting on weakness, but with caution. Remember, mark to market news may spark a fury of buying.

First goal: money management. Second: profit.

Talk About Part Time

2009-04-01T11:26:00.001-07:00

Days left: 97
Status: on time

Made $207 today. Taking off early (heh, 10:30 - 11:30 AM PST is definitely the kind of job I can handle) because this week is my brother's spring break, and we're going to get some food. I used $TICK today, which helped keep me calmer. I like knowing more about the internals of the market. I'll post more on today's trades (one loss in ES that I would've left on if I stayed home until the close, and another nice trade in JPM, which covered my losses and pushed me up to my final number).

Take care and good luck.

The Reasoning Behind a Bailout

2009-04-01T06:08:00.000-07:00

Two Things

2009-04-01T05:49:00.000-07:00

I have a class this morning, but before I head out I wanted to post links to two articles that will have a big effect on trading sentiment today:

Obama Said to Find Bankruptcy Likely for GM, Chrysler

and

ADP Says U.S. Companies Reduced Payrolls by 742,000 (~100k more losses than expected)

Maybe Tuesday

2009-03-31T17:18:00.000-07:00

I didn't trade today, as I've decided trading on Tuesday's and Thursdays is, at least for the moment, too hectic. Tomorrow I'll trade from 10:30 AM PST onward.

Looks like there are several economic numbers financial pundits can manipulate tomorrow. Even though FinViz rates the ADP Employment numbers fairly unimportant, those are what lead up to the overall unemployment rate that will be released on Friday. If they're better than expected people will throw whatever money they have at you to purchase some nearly bankrupt companies. If they're shit, well, we might break through the 50-day moving average.

In any case, it looks like the unemployment rate will be ~8.5% which should knock some sense into the bulls. But, there's always a way to make the world look a little better.

Taking a look at today's action on the S&P 500, I would say market participants nearly closed the gap down that was created on Monday morning. Futures currently look like shit and the drop in the afternoon didn't look so hot either. Today was probably just a gap fill. Also, if the bears can take control and push this below the 50-day MA, I'd say this current action is distribution, which will result in lowers numbers the week ahead.

Also, first quarter earnings will play an important role in holding up or knocking down Mr. Market. Beware.

$TICK

2009-03-31T10:22:00.000-07:00

Afraid to Trade tends to have very good posts describing technical analysis setups that take place during the day. Recently, I've been meaning to take a more detailed look into the $TICK. Well, AtT did just that today. Check it out. It is a very useful article on a pretty sweet supplemental trading tool.

Geithner's Plan

2009-03-30T16:48:00.000-07:00

Mish's has a good article on Geithner's plan.

Sometimes It's Just a Good Idea to Book It and Go Home

2009-03-30T12:25:00.000-07:00

Not a bad day, although not the best. What I did like was how I saved my ass from FAZ (which could go to the pooper during the close; or not...but I'm out). Came out about $292 richer (well, my friend did at least). I really didn't want to hold into the close, because of all of the gaps, above and below. Hell if I know what's going to happen.

Here is a chart showing the gaps:

Also, I got someone (my mom =)) who is willing to back me in a prop account. I'll have half of it within the next month or so (maybe as soon as two weeks) and she'll cover the other half.

I'm stoked.

PS: Here's the amount of days left for my goal (I didn't make over 400 so only one day off today, not one and a half or anything crazy like that)

Days left: 98
Status: On time (+/- 0)

Doors of Perception Open

2009-03-29T16:55:00.000-07:00

Well, it is The end of my Spring Break.

Heh.

Thank you, The Doors.

G-20 Summit Protests....

2009-03-29T10:59:00.000-07:00

This kind of stuff slightly scares, slightly amuses, and slightly irritates me.

"Let's dance around and chant slogans to get our message across the the world is not fair!"

Hmmm...sounds productive. I understand the pain, but if these people wanted to help, they could always travel to underdeveloped countries and teach the people to read, write, and perform basic arithmetic. Imagine the amount of benefit those who have so little would receive. Also, any ordinary citizen of these developed countries has many times more money than a good 2 Billion people on the planet Earth (if not significantly more). Dedicating 1/4 of their wages to help the people who they care so much about would greatly alleviate poverty.

I'm not trying to sidestep the issue of the overwhelming inequalities in the world. And, I understand the anger directed towards "those in power." But really...these people have a lot more power to change the lives of many, many people than they realize.

Current Trade Win/Loss Stats

2009-03-29T09:34:00.000-07:00

It's not completely accurate because of some technical reasons (how IB executes and keeps track of certain trades), but it does help me get an overall picture of how my trading is shaping up:

56 win = 64.4%
31 loss = 35.6%

I would post the whole sheet of info, and I still may, but it is in image format, fairly large, and unwieldy. There were also a few break even trades that I remember that were hard to find in the report (again because of how the form is printed). In any case, it gives me a general idea of what my hit and miss score is.

Also, it shows the importance of me staying away from the market at certain times. Most of my profit loss comes from a few trades that were executed during economic events. Again: money management is key.

Still up though by ~1%. And the above gives me some confidence to continue in the positive direction.

PS: Interesting fact - My commissions totaled $458. Another important piece of info that can eat into trades. I'm happy I avoided turning negative from commissions.

Tilt

2009-03-28T17:37:00.000-07:00

Definition: When a poker player lets his or her emotions cloud poker judgment, it's called going "on tilt." Often, when a player suffers a bad beat or a losing streak, they will go "on tilt." (source: About.com)

I always wondered what poker players meant by that. Definitely can apply to traders as well.

Education.../sigh

2009-03-28T15:05:00.000-07:00

I know we're all entitled to our own beliefs (at least in theory), but this kind of stuff seems a little backwards to me. For instance, take the following:

Board members also deleted a reference to the scientific consensus that the universe is nearly 14 billion years old. The board's chairman has said he believes God created the universe fewer than 10,000 years ago.

What good does manipulating a text book to fit your own views do for anyone (especially the kids)? I don't get it. People say they want good jobs, but there are all sorts of obstacles put in the way of a good education. Sure, the average person doesn't need to know about evolution or big bang theory or any of that stuff. But if you want to make money, science is a good area to go into. And in science, having a rigid conviction of "I believe it is so and I'm entitled to my opinion" doesn't necessarily help anyone.

I guess the underlying problem that probably can't be fixed is that most people cannot perform the kind of jobs that actually make money in the United States. Many people talk about the good days of manufacturing jobs, but those jobs can and will be transported to areas where people will accept lower wages. Supply to fill these jobs outweighs demand.

In other words, you need more than a 10th grade education and a bible to make it in the world now-a-days, and I wish more parents (and committees) encouraged children and young adults to go down this much more educated path.

PS: I'm not against religion. I'm not religious, but I respect others' right to be so. The above (whether it sounded like it or not) reveals my frustration with the education system in America (including parents).

Hmm....I really don't know

2009-03-28T14:27:00.000-07:00

Articles like this at one time got my support. Now I find them too idealistic for my taste. Yes, the cameras probably would not be put in if they provided the cities with no economic benefit. But that's how many things work. I've spoken with police officers (higher up ones) during good times who have told me that a large portion of the traffic tickets they give out are not for safety reasons, but for revenue.

I understand the anger towards politicians and other officials saying, "It's for the good of the common citizen" or "It's for safety" and having data show that it is obviously not. Unfortunately, that's how a lot of things work in many areas of society because certain things do not fall lightly on a common citizen's ear. People like to hear that the police department is there to promote safety for the common good. But there's a lot of crime, and in order to prosecute the cases that don't have immediate financial returns, sometimes using codes of law that do provide returns helps ease the stress.

Is it right or wrong? I don't know.

I'm guessing the job of getting the books correct doesn't play well with idealism, though.

Sometimes...

2009-03-28T12:42:00.000-07:00

Sometimes I read about how a trader has trouble, psychologically, just entering a trade. In his or her mind, the edge is great enough to make the trade worth it. But, beneath it all, there's a fear of getting hurt by the smaller half of the probability that is not in your favor. This arises within me after I get burned or when I just am not "feeling it."

Well, you gotta bite the bullet.

When I log on and am feeling the above, I find a good point of entry and execute a trade with a set amount of loss and a set amount of time I am willing to allow it to stay on. I have at times merely put on a trade to take it right back off, just to get into the market. Sometimes all you need is the success of merely executing a trade. At least, that's the case for me. I was in the market. I got out. I'm okay. I can do it again, and this time focus on boosting the profit potential.

Sometimes that's what you need.

Don Miller and the Tao of Poker

2009-03-28T08:31:00.000-07:00

I read a lot. It's one of the ways I learn. By reading, I not only have access to a larger swath of experience and knowledge, but it also allows me and encourages me to create new mental models. These models can rest on complicated subject matter that I have little experience with, or they can describe and redefine daily occurrences.

These models are important for understanding and eventually creating success. If you do not understand the events that lead to a desirable event, how can you streamline your surroundings to achieve the event at a higher rate?

Anyway, Don Miller mentioned a book called The Tao of Poker and I began reading it this morning. I'm only a few rules into it, but am surprised (and pleased) by its relation to trading. Personally, I don't like poker because the amount of input (work) seems to overwhelm the output (money), at least for me. But I do understand its relation to trading and other aspects of life (and I know many people who love playing the game).

While I think every rule thus far could be applied to trading, here's an excerpt (part of rule 13) that, in my mental model, I like to sum up simply as, "Don't force it."

And poker is similar to driving in traffic. You see other cars move over, so you move over; you notice a certain lane is open, you take it; a bunch of cars move one way as a group, you move the other; a major tangle appears to be forming, you look for a way to navigate around it. You try to pass someone in traffic, they speed up, you back off. A parking spot appears, you move toward it, somoene gets there ahead of you, you back off. And so on. It is the drivers who refuse to merge with the flow--who try to go outside the lines--who usually have the bad things happen to them. (Boldface is mine)

Today

2009-03-27T12:00:00.000-07:00

Trades for the day:

I decided to sleep in this morning. It's my last weekday of spring break and I had a pretty good week trading. A break should do me good, not to mention I didn't want to trade while Obama chatted with the bankers about how best to prevent the apocalypse.

Instead, I skated (for the first time in a very long time) up to a pool about 1.5 miles away from where I live. On the way there, I lost control (loose trucks on my skateboard) and nearly killed myself! (exaggeration) When I got to the pool there was a sign saying that it would be closed today for insecticide spraying.

Oh well, I had a good time getting there.

I tried to put on a trade just a little while ago, but I decided it is best not to play with something that I may have to keep over the weekend. Not today. I don't think I could handle that.

Hope everyone's week has gone well.

Fighting Foo

2009-03-26T22:16:00.000-07:00

Some music. Some sleep.

Foo Fighters - New Music - More Music Videos

Pistachios

2009-03-26T20:25:00.000-07:00

The Big Picture has been posting some Dilbert comics recently. To me, comics are like potato chips (or pistachios), you have one and you go for another. And another, and another until you're sick. Well, here are a few good ones that relate in someway to the current economic predicament:

Mental Exercise

2009-03-26T19:55:00.000-07:00

Check out 3D Logic for an online flash game that will keep your mind in shape (or, at least, give it a good workout!).

Disclosure: I had to use a walk through to beat level 16. I did get through all of the other levels and continued onto 3D Logic 2. Heh. I guess my love for puzzle games translates to the markets.

A Misstep

2009-03-26T19:44:00.000-07:00

I wanted to talk about my first trade with the NQ today. I slipped up and fell for a solid $40-50 loss right off the bat. Frustratingly, the trade was not supposed to (in my mind) be executed! But I guess I haven't used the IB trading software enough yet. I put in an order to sell at 1249 so it sold right off the bat, as the price was higher than 1249 (to a computer, logically it's better to sell higher...no?). Well, the reason I set my entry at 1249 was because that entry would have been below the low of the day and entering the gap up.

I figured that if it broke down to that level (which never happened) it would continue and possibly fill its gap. I got doubly burned because I was entered at an area that would never be retraced. Not to mention the NASDAQ (like I mentioned in my previous post) does not rely as heavily as the S&P on the financials.

I need to enter limit orders...not stop orders (or stop limits?), which is what I think the standard is set to at the moment.

Now if that were the only mistake I made today in the NQ...

Up and Down Day

2009-03-26T12:02:00.001-07:00

Crazy day for me. I made it out with a $205 profit. Here's a list of the trades (NQ trades being mostly unprofitable):

I'm going to take a break here (I was down $800 at one point! and am tired) and mark off one of my days.

Days left: 99
Status: On schedule.

Note to self: NQ, while definitely coupled with the other two indexes, trades differently. Watch the techs...dummy!

Mid-Day

2009-03-26T11:09:00.000-07:00

I should not have traded NQ. I know very little about the NASDAQ and wasn't even watching the techs. /sigh

Interesting: % Of Stocks Over 20-Day

2009-03-25T21:11:00.000-07:00

Check out this post at Trader's Narrative.

Quantitative Easing

2009-03-25T18:27:00.000-07:00

Here's a Wikipedia article on quantitative easing, which (simply) occurs when the Fed increases the money supply and thus the reserves that banks have, and from which they can lend.

Bernanke's quantitative easing policy involves buying treasuries. Check out today's entry on The Housing Timebomb. He puts together a good picture to show how the markets are not responding as hoped.

Percentages

2009-03-25T15:16:00.000-07:00

I don't have access to all of the trades I've made over the past month, but I would like to keep track of them here (as I've done for the last two days). I want to know what my accuracy rate is overall.

In the last two days my trades were 2.3% breakeven, 4.7% losing, and 93% winning. These figures count today's stock trade as a single trade. I doubt I'll stay this high for long, but I'm not complaining =)

(I'll try to get my hands on the trades I've made over the past month. I'll see if I can be granted access)

50 Day Bounce

2009-03-25T14:17:00.000-07:00

Look at that bounce at the 50-day MA. It's what I was talking about yesterday. I'm not sure if it will hold or not. The speed at which we fell in the afternoon would scare me out of a bullish position. But, I also do not think the break below the 50-day will be easy. At the moment, I'm looking for some more consolidation before a move in either direction. I'd continue to watch the 793 area for potential bounces or breakdowns. Bounces or breakouts may occur around the 825 level. I really like the patterns that I posted below. I find head and shoulder patterns (or slight variations of them: double tops, triple tops) fairly reliable and easy to get out of if they don't appear to be working. Also, I like watching for flags--basically, consolidation levels. If it feels like consolidation is taking place and you jump on, there are often large price breakouts shortly thereafter.

Scalping

2009-03-25T12:00:00.000-07:00

Last trade for the day was a winner! YAH! It was a really fast scalp. Just playing the volatility in the marketplace.

That puts the account at $50 short of break even (last Wednesday and Monday's losses). I have a plan that I think will allow me to reasonably build my friend's account with relatively little stress on me. I'm going to aim for a $200 gain every trading day in the S&P 500 E-minis. If I accomplish that, his account will double in 100 days, which will be sweet for both him and me. Also, bagging $200 a day in the futures market is not too bad with the account size I'm playing with. When I push over that amount I get a little shaky. Today was no exception, it just turned out well. I'll also put on a quick stock scalp for $100-300 depending on the day and if I have to follow the PDT rules that day.

I'm going to keep track of how many $200 days I have left. When I get to the end I'll modify the plan. That gives me 100 days (if I make more in a day I can mark an extra off, and add one for losses).

Days left: 100
Schedule: on time (beginning).

Also, I found that I could trade Nasdaq futures with a margin balance of $2k. I'm hoping to do something similar with that account. Maybe aim for a $20-40 daily gain.

Sharing Time

2009-03-25T10:31:00.000-07:00

These are from earlier today, but they still provide nice, almost textbook examples:

Bear-Flag:

Head and Shoulders:

Cup and Handle:

What It's Supposed to Look Like

2009-03-25T09:28:00.000-07:00

This is what my trading should (sorta) look like:

After this morning's trading I've made up a little more than half of the losses taken on Monday. It's a rough business, but it is good practice (e.g. trading multiple lots and working on patience). Don Miller wrote a Q&A yesterday where he talks about the only thing that truly matters in trading (or anything else competitive, for that matter): Focus. If you can clear your mind of all its clutter, you can build the positions necessary to develop positive results. If you don't clean out the clutter, you're going to do stupid things like I did on Monday and last Wednesday (FOMC Meeting).

Here's to a little focus!

And some Modest Mouse to keep my elation properly regulated:

Bukowski (Live) by Modest Mouse.

PS: Going for a walk.

Brokerage and Tomorrow

2009-03-24T22:11:00.001-07:00

I think I've found the broker that I am going to use to trade futures: MB Trading. Looks like a pretty sweet deal. They charge $2.09 per side of a S&P500 emini trade with $3,094 in margin. If I group together some cash I should be able to get that amount together. I figure that if I can get four ticks (i.e. one dollar on the S&P), or $50 in profit a day, I'll do fine for quite some time. Hell, I could do well just scalping $25, or two ticks a day.

Anyway, tomorrow depends largely on how the Obama speech was perceived. Success, failure, or entirely vague? I don't know; I have trouble watching that claptrap.

If we can maintain price above the 50-day MA I think this may be a consolidation, which means, we'll hover around here for a few days until enough people buy into the market that there are few sellers, thus pushing the market up. I don't think things are all that certain for tomorrow, definitely not like they were on Monday. Watch the ~800 level for a bounce--it'll make a nice long entry for a good 5-10 points (hopefully). If we head as low as the 50-day at 794.38 (~795 for simplicity) that fits the bounce level perfectly. I'd buy for some points and decide whether or not to hold until 820ish max. I'll probably get in around 800 and out at 805. All depends; again, tomorrow isn't set in stone.

Citigroup and Their Operating Profit

2009-03-24T13:38:00.000-07:00

I read John Mauldin's Outside The Box and Thoughts From The Frontline whenever I receive them in my inbox. Today's was interesting as usual. Here's a rather humorous quote to spark your interests:

"Citigroup could burst into flames while Vikram Pandit sells lemonade in the parking lot, and Citi would still post an operating profit. Operating profits exclude what happens on the balance sheet."

Taking a Break from Trying to Make a Million in a Day

2009-03-24T12:50:00.000-07:00

I had a horrible day yesterday: I didn't follow my advice. I should have stayed out or stayed long. I went short a few times but got out before the account was totally destroyed. I made back a 1/3 of the losses today. From now on, I'm going to stop forcing things so much. I can do a fairly good job of making $200 a day and should just be happy with that right now. When I push for higher returns I end up getting screwed (for the most part), especially when I do it during announcements, against positive news, etc...

Taking a break from trying to make a million in a day. Heh.

Update: I think I might do better if I opened my own account to trade futures and eventually stocks. One reason I push so hard is because if I make $200 a day, I get $20 at my 10% commission rate. That just doesn't feel like a lot, and really not enough to make up for the trouble of earning someone else $180. The incentives are all off. Because of that I end up trying to push for $500 or $1k a day and end up, for the most part, coming way to close to falling, or falling. There are reasons I cannot make those high amounts, the main being my money management setup isn't made for the pattern day trade rules, and I can make $500 or $1k easier with stocks than futures.

I'm saving up the $4k necessary for a futures account at Think or Swim (hoping to use their software under the commission schedule of another broker). Once I break $5k I'll think about getting an account with a prop firm. There are some pretty cool trading firms out there that would allow me 50k-100k (and sometimes more) in capital to trade. Also, with them I can get in and out whenever I want: a few shares here and there or my entire bankroll. That's the freedom I would like to have on my current account.

We'll see how the rest of the week goes. I have about $2k of the money needed for the futures account. I have some bonds and stuff saved in the bank too--not sure how much. I'm checking it all out to put it together for a decent starting account.

US to Buy Toxic Assets?

2009-03-22T20:38:00.000-07:00

US to buy up toxic assets. This is the kind of news that can make or break your account. I plan on keeping a watchful eye on the market, expecting bullish action. If I'm short, I'll get out should the tides move swiftly. No holding for a rebound this time.

Also, I'm going to be looking for trending patterns. I want to see "cradles" forming (moving averages converging with candles residing on top) and I want increases in price followed by consolidation, followed by further price increases.

We'll see how tomorrow goes.

Some Numbers for Thought

2009-03-22T11:15:00.000-07:00

How will current Americans hold up over time? Hmm....

Outsourcing the Child Care

2009-03-22T09:27:00.001-07:00

Report: Many U.S. Parents Outsourcing Child Care Overseas

Kill the Buddha

2009-03-21T19:08:00.000-07:00

There's a saying in, I think, Zen Buddhism...although I could be wrong about its origin. It goes something like, "If on the path to enlightenment you run into the Buddha, kill him." This saying applies to trading.

"If on the path to profitable trading you run into a trading guru, kill him."

Obviously, I mean this metaphorically. The jist is: you're going to have to find the ability within yourself. Once you can shed your dependence upon another, you will be one step closer to success.

My (Relative?) Strengths

2009-03-21T17:12:00.000-07:00

Reflections on trading strategy:

I'm trying to figure out exactly what gives me the edge I have when it comes to trading. Yes, my screw-ups have hurt me. But my percentage of successful trades is greater than 80%, maybe even 90% (I don't have access to a list of trades I have made, so I can't state the precise figure). If I were more careful about cutting my losses, or even took profits and entered positions gradually (unfortunately not available to me with stocks at the moment), my gains would consistently compound and financial freedom would not be far away.

I know F&G Trader and Trader-X have high success rates. I'm beginning to get to that level as well. I don't use many technical indicators. I use moving averages to help determine resistance and support on larger time frames and to help identify uptrend days. I use RSI in order to assess the likelihood of pullback and upside. I'll use stochastics on the daily and weekly charts, with caution, to determine overall sentiment and whether a rebound or pullback may occur.

What I find most useful, however, is the ability to identify support and resistance levels and to utilize volume and candlestick information (shape and patterns). All of these, for me, prove to be far more successful at generating a profit than any technical indicator I have ever used. Each of these enables me to anticipate direction a little more accurately. If you can determine direction and when the momentum is likely to drop, you have yourself a good trade.

Also, over the last year (the anniversary of my first trade is somewhere around March 23rd--a 2% gain in Apple!, albeit it went on to gain much more) I have learned to get a feel for how the market reacts to certain news and position myself accordingly. Most importantly, I have learned to filter out (i.e. for the most part, turn off) the main stream media. CNBC's advice has not made me a buck, and when I started, contributed to my first loss. So many in the media have a job to sell you a story. If I want to read a story I'll pick up a classic or something recommended to me by someone I respect. When it comes to economics and the market, the last thing I want is a story. For me, this is not "entertainment," in the sense someone would find entertainment betting on horse races (something I never found enjoyable, in it of itself). This is business.

Another useful skill I have striven hard to develop is my detached market perspective. I had a love affair with the solar stocks, and after that, I decided that such emotional attachment carried no financial value. In addition to never purchasing a stock solely because I "like" the company (there needs to be more than that), I have learned to objectively identify entries and exits. Once the emotional states of fear and greed take over, consistent trading begins to wane. Greed tells me to stay in just a little longer, or to get in a little too early. Fear tells me to get out sooner, or not to get in at all. If you can overcome those feelings with successful execution of objective analysis, it makes it harder for the feelings to arise in the future. Get in the habit of detachment. It needs to be with you throughout your participation in the market. Be emotionally connected to your family, to your friends, to yourself. The market, on the other hand, has no feelings. Don't treat it as though it cares one way or the other.

Looking Grim

2009-03-21T15:32:00.000-07:00

Tulips

2009-03-21T12:49:00.001-07:00

From The Big Picture. I like Ritholtz's blog: he updates frequently, linking to various opinion and informative pieces, and has a large following with quite a bit of discussion in the comments.

Maybe if I write more good things about him I will get a free copy of his upcoming book (Bailout Nation). That would be sweet!

No Balls, No Babies

2009-03-21T08:43:00.001-07:00

I love this short story from Turtle Traders:

When I was about 23, I was in Vegas playing blackjack for the first time. I was at the $5 table and asked the dealer if I should double down. He told me, ‘No balls, no babies.’ Sometimes you just have to go for it.”

So short. So sweet.

hmm.

2009-03-21T07:59:00.000-07:00

Why Do Intellectuals Oppose Capitalism?.

Opposition to 'Let Wall Street Pay for Wall Street's Bailout Act'

2009-03-20T20:27:00.000-07:00

I received this message from my local congressman today regarding the .25% tax that would affect trading:

Thank you for taking the time to contact me regarding investments. I appreciate hearing from you on this important issue.

In the last century, the stock market has been a symbol of America's economy. When it went up, our economy prospered, when it went down, our economy faltered. Still, for most of the last century most Americans had little direct investment in the stock market, but over the last two decades this fact has changed dramatically. Today, more than ever before, the average American has a direct stake in the market. Whether it has been through direct purchases of stock or through retirement funds like IRA's or 401k's, the stock market has become an invaluable tool for individuals and businesses to save for retirement.

Over the last year, we have seen our economy struggle and hundreds of billions of dollars have been injected into our financial markets in an effort to stabilize these assets. In a proposal to pay for the costs of these bailouts, Representative Peter DeFazio (D-OR) introduced H.R. 1068, the Let Wall Street Pay for Wall Street's Bailout Act, on February 13, 2009. This bill would impose a tax of up to .25 percent on all security transactions as a mechanism to pay for the Troubled Asset Relief Program and other bailouts. While well intentioned as an effort to protect the taxpayer, I strongly believe that this bill will do more harm than good. With American's long term financial health increasingly tied to the stock market it is ill advised to place a tax on investment that will hurt our middle class even as their retirement accounts are disappearing. If this bill comes before the House of Representatives in its current form, I will oppose it.

Again, thank you for contacting me. If you have any questions, please call me or my office at (***) ***-****.

Sincerely,

Brian Bilbray
Member of Congress

The act would harm traders, investors, and all Americans alike. The reduction in liquidity, the concentration of power among those who have the wealth to perform the transactions, the inability for average Americans to cash out their 401ks without paying another tax (doubly so considering the loss of liquidity) is not worth it.

It is, however, another good example of how Congress likes to write galvanizing bill titles.

You Got Some Dandruff. It's on your Head and Shoulders...

2009-03-20T13:22:00.000-07:00

I don't like you GS. Why such a high price for such a shitty company? Oh well, at least it has maintained a good portion of its value relative to its competitors. I'm hoping for an open at ~100 on Monday, allowing me to short a possible head and shoulders setup. I'd get out an intraday chart to see if that's even likely, but I'm a little lazy right now.

Sorry GS. Though, I'll consider buying you when you're not so damn expensive.

Apple of My Eye

2009-03-20T13:18:00.000-07:00

I'm incorrigible, but I like dumb cliches especially when I can make them punny (pun - y). Oh well. Looks like Apple may break down next week. I'd say the likelihood of such an occurrence is doubly so if the entire markets continue their trend lower. I'm shorting this if the price is right.

And I think the price is right, bitch.

Today's Trades

2009-03-20T12:52:00.000-07:00

I figured I would post a print out of today's trades for the site. Not sure if I will continue to do this, but we'll see. I felt really anxious today. I didn't want to hurt my confidence like I did on Wednesday. But, after last night's gains and today's gains, I'm building it back up.

I made four trades today because I didn't feel like I had enough edge to do anything but scalp. A couple of times I thought about going long into the close, but things didn't look right. There was too much pressure pushing down on the bulls. I made some money though, which is good.

After Hours

2009-03-19T16:40:00.000-07:00

After Hours by Velvet Underground.

Trading the ES futures after hours used to scare the hell out of me. I had a terrible experience my first time. Tonight, while still anxiety provoking, is becoming more manageable. Made 38.90 on two trades.

The ambiance of after hours trading in the futures market is entirely different from the fast paced regular hours. There's much less volatility and there's much less liquidity. The price can stay within the range of a tick for fifteen, maybe thirty, minutes at a time. I much prefer market hours, but there's nothing wrong with getting a little trading in when time permits (after school). If you can catch the opening, sometimes you can even make some money on a divergence between the future's price and the price of the actual S&P 500.

Someday I'll give that a go. Right now, I'm not skilled enough.

20/20

2009-03-19T13:54:00.000-07:00

First I knew I shouldn't have been in the market during the FOMC meeting; and, after holding on to my trade, I knew there was a high probability of it reverting back down. But, I got out. Oh well. Lessons, lessons.

Anyway, the first mistake is infinitely worse. Always be careful around news events. And the second mistake wasn't as bad as I was taking precautions and following the advice of the person whose account I trade.

Oh well.

XLF is below its 50-day again. And the S&P500 failed at maintaining its position above its 50-day. Somewhat anticipated, but with yesterday, I felt shaky.

Didn't get to trade, but for an hour or so. Made one break even trade on the ES and another +.50 trade for a gain of 15.4 after commissions. A gain nevertheless.

Willingness to Think

2009-03-18T21:01:00.000-07:00

"If we don't want to disturb the current relationship between inner and outer, we will consciously do whatever is necessary to make sure that we don't expose ourselves to anything that might threaten that relationship or think about anything in a way that would change the relationship. Change is the result of, first, a willingness to think."

Found that quote in a txt file on my desktop. I think it's from something written by Mark Douglas (of In the Zone and The Disciplined Trader).

codependence?

2009-03-18T19:28:00.001-07:00

Take a little more responsibility for yourself. We don't always want to take care of you. Take a little responsibility for yourself. Drop a little responsibility for those others in your life who can take responsibility for themselves (parents, children, significant others, etc). They can do things for themselves. Children are a responsibility, but you should slowly wean them off of dependence upon you. A child of two obviously needs you to provide food. But does a child of twelve need you to do his or her laundry? Or clean their room? What about a child of sixteen?

But I'm not really talking about children, although, that's where the problem often develops. I'm talking about other people who you are taking care of in your life. You don't have to. Wean them off of it. Learn to say no. If someone is addicted to drugs or is an alcoholic, turn them into a rehab center. If violent, alert the police. But don't let it ruin your life.

Well, I'm not planning on taking care of people who can take care of themselves anymore. It's not worth it. There are plenty of people in the world who deserve and can actually productively use my resources and time.

Note to Self

2009-03-18T18:55:00.000-07:00

Try to think of a bullish market as a bearish market upside down. It's not, but try to think that way so that you don't go short on bullish days. I know you know what a trending day looks like. Don't be so hard on yourself for shorting fifteen to thirty minutes before the FOMC rate announcement. But I still know you have trouble going long. It's hard. It takes faith in everyone else. And it takes longer to move higher than it does to move lower.

But it's a necessary part of trading.

GDX, gold, treasuries, blah blah blah FED

2009-03-18T18:48:00.000-07:00

Look at the reaction to the Fed's announcement. GDX burst upwards. I'd consider buying around 34.50 and definitely at the 50% retracement (as long as shit isn't hitting the fan).

First target at 37.80ish.

daily, tomorrow, fibs

2009-03-18T18:35:00.000-07:00

There are no certainties, especially when looking at a daily chart. Well, I suppose you could argue that. But, my point is, I haven't got all of the information at hand from looking at the daily to determine where tomorrow's price is most likely to move. I'd say we'd still get some upside action. The response to the Fed's release was explosive to the upside. A big part of me is still bearish, but that's my bias. I'm trying to purge it.

As you can see from the fibonacci retracement levels, there's been very little retracement on the daily since the low. I'd be surprised if it began retracing right now, especially with today's joy. I'd consider buying around 77.50 and selling around 80.90 - 82; or whatever their corresponding prices are on the emini.

Also, when I say "consider" buying or selling, I mean exactly that. Just from the daily chart you can't really determine a short term entry point. You need to look at the intraday in order to decide whether certain points on the daily will hold. If they appear to be holding, then you can go in. But until then, the daily merely gives me an outline.

bullish percent index?

2009-03-18T17:26:00.000-07:00

I don't know what it means. But it tends to be bullish, going from below 30% to above 30%. This market could get some legs.