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 50 Trade Recap

I made too many trades this week.  At one point during the week I had four stocks being traded at the same time.  That’s just too many for me.  For one, it doesn’t allow me time to do research looking for other buys since I spend all my time watching my current holdings.  I need to get my holding down to just one or two at a time.  Some of those trades were made with no firm plan or strategy involved.  I spent the whole week in IU’s chat and learned some things about momentum and spoke to a few people in there as well.  Some of those I spoke to are new to this like me as well as some who are more experienced.  It was nice talking to some of the new traders in there and see what they are doing to help themselves make better decisions.  I also took some of the advice of the more experienced traders.  I decided to re-work some of my rules and adjust my strategy for next week.

So, here’s my results from the last five days in alphabetical order:

ANDS – This is a pharma stock that I bought on positive drug news on Thursday morning (first red mark).  It gapped down overnight from Wednesday and started to uptrend from $2.60.  With the positive news and $3.00 appearing to be resistance, it appeared I could get a $.25 move during the day or into Friday.  Boy was I wrong.  It dropped to $2.50 on Thursday, went sideways then climbed back to $2.70, only to finish weakly.  I held it overnight and it dropped Friday as well.  Once it lost support there at $2.50 I was done with it.  I sold for another loss.  This is a two-day chart from Thursday and Friday.

ANX – I bought this into the close on Monday as it showed good strength and volume for an overnight hold.  It spiked up a little bit on Tuesday but I didn’t get out as it was only up about $.02, then it collapsed really fast.  I was still up on the trade and watched it consolidate looking for another climb, but it dropped again and I sold for a small loss.  I sold out of fear and panic as it was only down about $.02 and starting to go sideways.  Really disappointing as I should have held on for just a few more minutes because it started to go sideways and climb.  Then, you can see the rest of the story from there.  This is a five-day chart of last week.

BGEM – I held 5,000 shares of BGEM over the weekend on a tip that was chatted about on Investor’s Live.  I got in at $.345 about two minutes before the close and sold on the Monday morning spike at $.40.  I tried a new tactic and sold 3000 shares on the first spike in case there was a pull back and then second spike later on.  I wanted to make sure I locked in some profits just in case things didn’t work like was expected.  It pulled back and then jumped again but I only got $.40 the second time as well instead of the high on that second spike of $.44.  That’s okay.  Then out of nowhere, it got pumped mid-day and went to $.70 by Tuesday.  No way to predict.  Bummer.

I’m happy that I made a profit and I’m happy it reacted the way it was predicted.  This may not have been a stock I picked myself, but the process I’m trying to master is using my own ideas as well as listening to those that are far better at this then I am.  So, this trade was clearly a success.  Total profit, minus fees $244.96.  By the way, a 3-month paid subscription to Investor’s Underground is $250.00.  Food for thought.  The two marks on the 14th are my two sales.

FRE – Speaking of trades that I spotted.  I typically have CNBC on during the trading day in the room with me.  On Friday there was news out reference the passing of HR 4173.  FRE spiked on this news and closed flat into the close Friday but on increased volume so I bought 1,000 shares as it closed at $1.29.  On Monday morning the momentum continued and I sold out at $1.38.  I was concerned it wouldn’t break $1.50 (nice round number) and I wanted to take my profit since I had it.  It did go as high as $1.60 on Tuesday, but its FRE.  The company is dead, so I didn’t want to hold this too long.  Just like TLB from last week.  Quick profit and get out.  This is what I have been doing for the last couple days on paper.  I’ve seen this type action with mentions on CNBC before but rarely am I in front of my computer when it happens.

I’ll be looking for when HR4173 is signed into law by President Obama as there will probably be another spike on both of these companies.

FNM – See the FRE trade above as to the how and why I bought this.  I held it till Tuesday morning when it spiked up and I sold out.  Probably too early as it continued up all morning.  I got took my profits and left for the same reasons mentioned above.

LZB – I sold this on Wednesday.  I held it through Tuesday when it crossed over $11.00 but it held just under $11.00 so I held for a spike on Wednesday morning.  I didn’t get a spike, but it crossed $11.00 again and I sold it at $11.05.  This has been my best trade so far.  I showed good patience in holding it and timed my entry and exit pretty well.  Course, my entry was a Tim Sykes alert, which is fine in my book.  He bailed on this stock when it didn’t break out fast, but I held on when it didn’t crack what I interpreted to be support around $9.70.  That big blue volume spike right before I bought it was his alert.  I usually wait a few minutes after his alerts to buy.  In this case I got about a $.10 better entry point by waiting.  Unless you count the drop Thursday morning, of course.  Too bad I have about half a dozen other trades that sucked.

MSHL – I bought this into the close on Monday looking for more strength going into FDA news on Thursday.  The volume dried up Tuesday morning and it dropped pretty quick and I cut my loss.  As you can see, the news was insignificant anyway.

DPDW – This is my dumbest trade of the year.  By far, hands down.  Dumb.  I had just sold MSHL and ANX for losses on Tuesday and was looking for a quick play to make up my money from those losses.  I bought strictly on emotion and hunch.  The volume was spiking and I thought I could make my money back from my losses on MSHL and ANX.  I actually still have it in my account since it hasn’t collapsed, but it’s tying up some money for other things and I just should never have bought it.  The volume has collapsed as well.  Time will tell how things go but the position is small, like my other ones, so I can afford to wait things out.  If I get any pop at all, in either direction, I’m out.

EYSM – This is a pump and dump that is currently being pumped.  I’m still flat here waiting over the weekend as it gains some pump.  Friday started to scare me, but I held on as the pump emails came in and it gained strength the rest of the day to finish down just a hair.  It has been having a lot of morning volume which has dried up every afternoon.

VLNC – Like I mentioned earlier, I have the TV on during the trading day and CNBC gave positive news on this stock.  IU alerted to it as well and it took off.  It had a slight pull back and I bought some.  It then started to pull back to $1.00 and held that pretty well so I kept holding it.  It looks like its support is around $.85 (also its 52 week low) so I plan on holding unless it breaks that level.  This level here around $1.00 is also its 3-year support.  It dropped to there right at the close on Friday and I may end up losing on this one.  My feeling is, since the volume came literally in the last few minutes of trading, I have to wonder how much of that had to do with the quadruple witching hour and lots of sellers rebalancing their books.  If I see any strength off this support level I may add to my holdings after what may have just been panic selling from institutions.

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.

Week 48 Trade Recap

Not a real good start to my experiment.  Two negative trades to start off.  At least I cut my losses fast, but that’s not much comfort to my confidence.

First some house keeping.  I forgot to mention in a post last week that I added some money to account.  I’ve been squirreling away extra cash over the last three or four months and added $5,000 to my account before starting this experiment this week.  So, my starting balance is $10,361.53 coming into today.

I’ll talk about the two trades first then recap what I learned today.

CCRT – This company has been up on spin-off and dividend issue news.  I watched this drop all morning then bounce twice.  I bought it on the second bounce but it was at the high of the bounce.  I should have waited till it cleared that resistance as it clearly (in hindsight) did not have the strength.  I sold it after it broke the lows of the day at $3.54 for a small loss of $106.98.  Then I spent the rest of the day watching it.  I was really upset with myself when I watched it break that resistance ($3.72) at around 10:00 am.  Frustrating.

This was a good learning experience to watch.  Around 10:00 am it broke $3.72 and had a nice bump but then went sideways for most of the afternoon before finally trying for $4.00.  Then right before $4.00 it got killed it.  Wow.  Then to top it off it did it a second time!  Wow.  My hand written notes for this buy was to get out just under $4.00 in case it couldn’t break it and ran into a lot of sale orders at such a round number.  Unfortunately, it did what I was looking for, it just did it a couple hours later.  Well, I was supposed to be learning this week and I did.  The hard way.

FLOW – I was alerted to this company with a tweet from Investor’s Live at around 7:50 am but it had already spiked from $2.70 to $3.25 so I held off looking for a pull back and consolidation.  This began around 8:05 am and I bought as it approached $3.00.  I should have waited till it clearly broke over $3.00.  It hit its head on $3.00 and dropped back.  It couldn’t hold on and bounced around $2.80 – $2.83 and I bailed.  It wasn’t doing what I expected and took a loss of $163.64.  Stupid entry point.  Should have been smarter and waited for a clear break over $3.00.

After reading what I wrote in my notes I realized that essentially I made the mistake on FLOW that I was trying to prepare for on CCRT.  I was going to get out of CCRT just shy of $4.00 because of the round number.  Then I bought FLOW before it had a chance to prove it was going to go through $3.00, a round number.  You can see from my history screen capture that I made both trades within two minutes of each other.

I think the other problem with this purchase was I didn’t do my own research into this company which really made this a flyer on someone else’s comment.  This is not to say that IL didn’t know what they were talking about, it’s just that I didn’t know what they were talking about.  I need to spend the time to better understand what is happening with a company before jumping into it.  I should take these comments and then do some checking myself before I put any money in play.

Another error was I was in such a hurry to get out of FLOW I had fat finger syndrome and got out with a market order instead of a limit order.

My total loss for the day was $270.62 or 2.61%.  That blows.

Have a good weekend everyone.