The Grand Experiment, Final Results

So, I’m back at work now full time.  Actually, I went back on New Years Day.  I’ve been trying to spend my time since then studying up on my notes and information I’ve obtained.  I have a lot of information to read too.

So, I started with $10,361.53.  My balance ended at $9,446.51.  A loss of $915.02, or 8.8%.  I made 18 trades and turned a profit on just five of them.  That hurts.

What have I learned?  Well, a lot.  Probably too much to put into a single post, but I’ll talk about some briefly.

First, day trading is a lot of work.  Now, it may not be work like building a house, but you spend a lot of time in front of the computer.  If you are trying to do your own research, you can add even more time to your daily routine.  If you’re trying to blog at the same time, add more time.  I put in a lot of hours (I didn’t track these) in over these few weeks and lost money. I have immense respect for those of you out there that day trade and/or do your own research and/or blog and make money.  That’s a lot of work and you earn every penny of it.  I know because I tried it.

Second, I learned that discipline is a huge aspect to trading.  Whether it is day trading or longer term trading.  I violated some discipline rules along the way and it caused me losses.  It also caused me to miss profits.  So, discipline works both ways.

Third, there are a lot of things I need to learn before I can trade more accurately.  I need to study up on the seminar information I obtained from Investor’s Underground as well as the tips that members there gave me.

Lastly (maybe), I need to reduce the number of my trades.  I don’t think I’m quite ready for 100% day trading.  What I mean by that is a day trader may make dozens of trades a day.  I don’t think I’m ready for that yet.  I think I need to study up and trade slower.  I won’t be able to trade everyday due to my work schedule, but when I do trade, I need to limit the number of my trades.

One person I met in IU’s chat only trades one stock at a time.  That person doesn’t buy a stock till they trade out of the current stock they are trading.  I found it difficult to keep a close eye on multiple stocks when I was trading.  Since then I learned more things to watch for on a stock’s behavior and if I have two or three stocks running at the same time, it will be even more difficult to watch them all.

So, I am going to spend the next couple weeks studying and re-working my trading style and my own personal rules.  I’ll be getting my proprietory trading firm account set up and I’ll need to learn a new platform as well.

I won’t be posting any more watch lists for a while.  I just won’t have the time in the day to do all that research everyday and work.  I need to re-focus on work and study up on trading and there just won’t be any time for homework and posting.  Once I get caught up with everything, I’ll probably only be trading full time on Mondays.  My work week is Tuesday through Friday and I don’t get home from work till around 2:00 am, so there will be no getting up with the markets except on Monday.  If I do start posting watch lists, they will be Sunday nights for Monday, but realistically, I doubt I do any more watch lists for some time.

That’s where things stand at the moment.  I’ll continue to update this blog as new experiences and trades come along, but they will not be daily posts and I don’t foresee any day trades for a little while.

Week 51 Trade Recap

I had better discipline this past week when it comes to how many trades I made.  I only made four this past week.  I also learned a new rule.  It has to do with stocks crossing from under $1.00 to over $1.00.   I don’t know for sure how concrete this rule is but I got burned twice by not following it.  In my defense, I didn’t know about it before my trades.  After learning of this (after my second loss) I started to notice this behavior with other stocks as well, so maybe there is something to it?  I don’t know.  My sample size is still pretty small, but I will be following it from now on.  I list the rule below in my trades where I got burned.

December 23 was the last day of my 14-day free trial at Investor’s Underground.  I did not renew the subscription.  I plan on reviewing all my notes that I have from being in the chat for two weeks and reading the blog posts and websites some of the people in chat pointed me towards.  I will be getting my Cy Group application finished this weekend and sent off.  It is filled out, I just need to scan it into the computer (about 50 pages) and send it back to them.  If they accept me into their program I’ll need to learn their platform as well.  Once all that is up to speed, I’ll be renewing my IU chat subscription.  That will probably happen around mid to late January.

The trades from last week are listed in alphabetical order.

AMKR – I bought this on a pre-market alert in IU’s chat Monday.  I didn’t get in right away at the open and let it pull back first.  I saw a little volume spike and bought some.  The long term chart seemed to indicate resistance near $7.50, but if it could get through that, then $7.70 might be in the cards.  Either way, with my small positions, I was looking to make a good trade rather than make a ton of money.  I would have sold it on Monday when it couldn’t break $7.50, but didn’t want to use up a day trade so I held over night.  It tried again on Tuesday for $7.50 twice but couldn’t get over $7.40.  The second run at $7.40 ended so quickly that I couldn’t get out fast after enough on that big drop.  When it stalled near $7.40, I got out.  3% gain and didn’t have to use a day trade.

CGEM – I bought this on Tuesday morning right at the open after overnight news with Pfizer.  I had a good entry point right when the market opened at $4.91 and thought about selling when it hit $5.50, but I had the PDR over my head so I figured I’d try to hold it all day to save a day trade.  So, another gain turns into another loss as I got out after it failed to maintain its sideways action late morning.

This was an interesting trade.  After I bought there was a lot of chatter about whether it was a good buy or not.  One person in particular kept making reference to it being a bad idea, etc.  I asked him about his comments in a private message to him and we talked for a few about it.  After hours, he (I don’t know if he was a man or woman actually so I’m using that gender generally speaking) spent about 90 minutes in a private chat with me talking about Bollinger Bands, 20 EMA, slow stochastics and how they help in spotting buy opportunities and short sale opportunities.  I copied that entire chat session into a Word document to study later as well.  It was very interesting and very helpful.

That was one thing I learned about chat in that two weeks.  Everyone (at least those I spoke with) in there is really helpful and want to help teach others.

HLCS – This was bought on an IU alert.  This is the second of the two $1.00 trades I made.  It was shortly after I sold out of this trade that I learned the following rule.  I learned that there’s an unwritten rule about stocks crossing the $1.00 mark.  I don’t know the exact rule, but there seems to be a consensus that after a stock crosses $1.00 and makes 15% or so, it pulls back.  I didn’t know that.  I bought HLCS after it crossed $1.00 and as soon as I hit the buy button it pulled right back.  I sold it after it couldn’t hold the slight consolidation between $1.05 and $1.08.

YRCW – This was mentioned on CNBC at about 10:30.  I pulled up the chart and it was at $1.10.  As volume increased I bought in looking for a slight run.  However, by the time I found the guts to buy, I had bought at the top of the spike at $1.18.  I held on for a little while, but it broke $1.12 and I sold.  This was my first buy of a stock crossing $.99.  HLCS was purchased about 20 minutes later and some time after that purchase of HLCS did I learn about this $.99 cross rule.

I started my experiment with a balance of $10,361.53 and that now stands at $9,273.58.  That’s a loss of $1,087.95, -10.5%.

Week 49 Trade Recap

I sold off two of my stocks this week for loses.  LSCC finally fell under $2.60 and I sold out for a loss of $163.36.  Volume has been declining all week as well.  I should have waited to make sure that the $2.70 level was really a break out.  In hindsight, volume had been decreasing leading up to Dec 8 and the decreased volume continued and it just could not hold.  In looking at the break out on Dec 4, the volume was much higher and the break out more pronounced.  That is what I need to look for.  On Dec 4 it touched $2.50, fell back then broke through that level and ran later in the afternoon.  That’s the momentum I need to watch for.  When you look at Dec 8, that just wasn’t there.

I also sold TLB for a loss as recapped in this post on Dec 11.   This was a loss of $55.93.

I am still long LZB.  I read somewhere last week that someone said that if this breaks out it will be a long slow process, “Like watching paint dry.”  Volume increased in the last 90 minutes on Friday and it finished over $10.20.  I tried to touch its 52-week high of $10.29.  That should be an important break if it clears that next week.  The next test after that is over $11.00 at $11.76.  I don’t plan on holding it that long as that might take another six months.  I will watch this on a daily basis and re-evaluate it each day.  If it takes out $10.29 and runs, great.  I’d like to see the high $10′s.

I spent the last part of the week in the Investor’s Live chat room.  I’m learning a lot there about momentum.  Course, you would think the learning curve would be steep at the beginning.  I bought BGEM right into the close and tried to get JYHW as well, but couldn’t type fast enough.  JYHW spiked from $.61 to $.67 in the last 5 minutes or so and that scared me off.

I read over and filled out the Cy Group application over the weekend.  I have to call them on Monday with some more questions that came up when I was filling it out.  I haven’t found anything on the internet saying they are a scam or “They ripped me off.”  That’s good.  I did find this blog entry from Welcome to the Gutter, but no follow-ups to it as of yet.

I have to do some more research in the application concerning this comment left on this blog about customers being employees.  I read that in the application about explaining that relationship.  It is a very long and complicated application and I had no plans on submitting it till I read it a couple times to be clear.  I’ll update my posts as I move along in this process.

I tried to do some day trading on the Think or Swim platform on Friday but found out the quotes are delayed.  I couldn’t keep up with the delay so I had to stick with doing things with pencil and paper.   That’s too bad.  TOS’s explanation to me was that real time quotes cost money, which I understand, so they are no able to do so for the paper option.  Oh well.  Not a big deal.

My account is currently in the red by 6.07%.

Watch List 12-11-09

Sorry about this, but I don’t have a watch list for tomorrow.

I had to take care of some professional tasks at work after the market closed and that took a couple hours.  I also had some personal commitments after work with friends and family.  I’m just getting home at 9:30 pm (mountain time) and don’t really feel like taking 2 – 3 hours doing research to get back up at 5:00 am.  So, I’m just going to recap what I’ve been learning the last couple days and talk about my stocks.

LSCC – I am still long this one.  I think it has been showing support at $2.60 so until it breaks that with gusto I’m going to hold.  I’m not too sure I’m going to come out on top of this one as it looked to rebound today only to fade into the close.  I nearly sold it when it hit $2.59, but didn’t.

LZB – I am still holding this as well and liked how it pushed over $10.00 again today.  I saw no reason to bail on this one today as well.

TLB – Well, I can surely say I called this one last night.  I held it overnight and was afraid I was going to take a loss here, and did.  Due to my small positions I am taking I only lost $55.93 as I bailed at $8.36.  I guess distressed companies don’t always have a ‘Q’ on the end, yeh?

So, mid-day on Wednesday I signed up for a 14-day free trial at Investors Underground / Investors Live.  Today was my first full day in chat.  I had it up all day from 5:00 am till about 30 minutes after the close.  It is very fast paced (I like that, actually).  I did a bunch of paper trades (on real paper) today and tomorrow I’m going to figure out how that’s done in Think or Swim so I can post a photo of my daily trading log.  I can’t prove I did this, but I made 11 trades, was red on four of them for a profit (after fees) of $921.  Now, was that luck?  I don’t know.  It was one day and most was made by scalping SNSS three times.  I could not believe how they called that in chat.  Unreal.  Same with ENER.  Someone alerted to it, then said it was a CNBC mention.

So, since I have no watch list for Friday, other than my holds, I’m going to spend the day in chat again and try to do my trades on TOS so it will be more accurate.

Also, I talked to a couple people in chat about Proprietary Trading.  Specifically with Cy Group Trading, who IU associates with.  I talked to a rep with Cy Group as well and obtained their application and paperwork.  I think there are about 25 pages of forms.  I have not read any of it over yet.  I would like to find someone who has specific experience with Cy Group and what their experience was like.  I tried to in the after market chat, but no one piped up.  Just a couple of us asking for more information.  I do like the restrictions they put on new traders.  I think that’s smart and would actually be beneficial to me.

Anyone out there have any experience with them?  Specifically with their training, seminars, chat, services, payouts, customer service, that sort of thing.

I Googled them and found a couple forums talking about them.  Still need to do more research but I think the concept seems sound.  Just concerned about any small print strings.

My Nickname

While I get things set up and ready for the coming weeks, I thought I’d take a minute to explain my nickname, which also happens to be the name of this blog.

Many of my co-workers have earned nicknames over the years.  Mine, The Donger, was given to me by some co-workers after a few years of various nicknames being morphed off my last name.  See, I had a supervisor about 7 years ago that could not pronounce my name correctly.  He constantly pronounced it “Herndon.”  Where the “d” came from I never could figure out.  His mispronunciation of my name even led some at work to call me that because they actually thought that was my last name.

Eventually, my co-workers morphed that into “Herndong” or “Herndog”.  Don’t ask me why.  That didn’t last long tho.  We were getting dressed for work one day and changing in the locker room.  The locker room banter can be pretty cruel.  Somehow, the topic of the day was the movie “16 Candles.”  I made the mistake of mentioning that I hadn’t seen it.  After much ridicule (just because there was now an excuse to pour it on), someone made the observation that I looked like the guy who played “The Donger” in 16 Candles.  I still haven’t seen the movie and I can’t understand why those who have seen it say I look like Gedde Watanabe.  See for yourself.

I’m not seeing it.  First off, Gedde has two eyebrows.  I only have one.  But the name has now stuck for close to 5 years and shows no signs of going anywhere.  Usually, when a name sticks, it’s yours.

Some of the more infamous nicknames at work include:

“Bypass” for my buddy John who had a heart attack 5 years ago.  “Marcia” for another guy who’s last name is Brady.  “FedEx” for Justin because he was famous for showing up to work with about 30 seconds to spare.  So he was always right on time.  “The Mamba” for another friend, but I won’t discuss how he earned that one.  “HunJoBut” for three friends.  It is a combination of the first few letters of their last names.  See, all three of them do everything together.  They’re like the Three Musketeers.  There’s also “A City”, which is a play on another friend’s name.  His last name is Avella, but I mistakenly mispronounced his name for years, calling him “Avilla”.  See, “A Villa”, like “A City.”  Get it?  We have two brothers that work together as well.  They also happen to be twins with the names Brad and Brian.  Their last name starts with “G”, so we gave them “G1″ and “G2″.  Steve was given the name “Super Chunk”.  His oldest son, who doesn’t work for us, is “Little Chunk.”

Probably the most popular of them all is poor Dave.  At first we called him “The Yak Back”, because he has so much back hair.  That has now been shortened to just “Yak”.  His other name is “RedG”, pronounced “Reggie”.  Some friends where helping him move one day and when they moved his dresser they found a men’s red G-string underwear in this drawer.

I decided to name the blog The Donger Trades as a kind of play on words from the movie and from my email address for this blog.  One of Watanabe’s more famous lines from the movie was “The Donger need food.”  So, I thought that “The Donger Trades” would be something he might say if he was a trader too.  Also, if you put an “@” sign after it, it kind of makes its own sentence when you read it in an email address.  Like “thedongertrades@(email account)”.

So, that’s where it’s from.  I earned it, it’s mine until such time my co-workers decide I need a different one.