Welcome to my world

 

 

Thank you for checking out my blog.  I’m glad you’re here.

I am still currently in the process of building this blog, so please be patient as I construct the look and features of this blog.

In the coming days I will begin regular posts on this blog about my experiences in day trading.  Both the good and the bad.  All spelled out for everyone to see.  If I fail miserably, then this will be a short term experiment.  If I succeed, even moderately, then this could be an interesting experiment.  I hope you stick around for the ride.

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%.

Watch List for 12-23-09

This is my last watch list for this week.  With the market closing early on Christmas Eve, I’m not even going to bother trading.  I expect volume to be light and I’m just not interested in trying to play that kind of weak action.

I made three trades today and I’m holding one over night, as outlined in my watch list below.  My two day trades failed me.  I got out fast to minimize my losses, but it’s hard to pull the trigger when everything I buy goes south in about two minutes time.

AAC – They announced a cash dividend of $.55 per share.  Weird how the press release was after the market closed, but the spike came mid-day.  Not that I’m saying anything…..just funny how that worked.  I will be watching for another try at crossing and holding over $1.00.  It is right at its one year high with its next point of resistance being around $1.20 from September 2008.

ADES – Broke out above its 52 week high early in the morning on contract news.  It briefly went over $7.00 but could not hold that level.  Monday, however, was its second big day on volume and price.  So tomorrow will be its third big day and I’ve found these can be dangerous.

AHD – Another stock spiking up on big volume and at its 52 week high.  This stock went into the last 30 minutes on good volume and strong price action to stop right at $7.00.  This action was based on a Citigroup analyst upgrade from sell to hold.

AMKR – I bought this stock after its morning pull back.  They raised their earnings guidance and the stock gapped up over night.  $7.50 is clear resistance and it made it up to that level right near the close but didn’t break over it.  I’m holding it over night mainly because I didn’t want to burn a day trade.  I would have sold it after it couldn’t break $7.50, but I’ll sell in the morning if it drops too much.  I’d like a second day gap up over $7.50 and then maybe a run at $7.70 (52 week high).  But that’s just hoping.

ATHX – Just when you thought it couldn’t go any higher, it did.  I watched this all day, afraid to chase it, and just couldn’t believe it.  Evidently, they entered into an agreement with Pfizer to develop and commercialize a stem cell therapy currently in development.

MBI, MTG, PMI and RDN – These are all home mortgage plays and all went up yesterday on the existing home sales data that came out.  I doubt I will play any of them, but they are all in my notes for next month when the housing data comes out again.

I hope everyone out there that celebrates Christmas has a wonderful weekend.  We have family dinners planned for Christmas Eve and Christmas night.  Then Sunday night we are having a big dinner party with friends here locally as well as a bunch who are coming into town for the weekend.  It’ll be a really nice four-day relaxing time.

Of course, not everyone will be having such a relaxing weekend.  There are 100’s of thousands of people who won’t be, but having served in the military, my thoughts go to those that are overseas this weekend eating dinner in the desert and mountains with their teammates.  And their rifles by their sides.  They all volunteered to serve and that takes a special person and a special family.  Don’t forget about them this weekend.

Merry Christmas and Happy Holidays everyone.

Watch List 12-22-09

Sorry, no detailed watch list for tomorrow.

My wife’s sister and her husband had a new baby and we spent most of this evening at the hospital with them and their new child, Orion.  8 lbs, 2 ounces.  They named him after the constellation.  So, once again family takes priority here.

Just off the top of my head, I’ll probably keep an eye on LNG again tomorrow.  I missed the move in the first few minutes of this morning.  I got caught up in the chat and took my eye off it and then didn’t want to chase it into the morning run up.  It pulled back pretty well then bounced off $2.60ish.  I made the comment that $2.60 seems to be the old support and it might.  I will definitely watch it tomorrow in case it jumps in the morning again.  Natural gas seems to be making a come back in the press and this may be a good multi-day play.

That’s about it for now.

Watch List for 12-21-09

Nuts!

I updated this post after I realized I neglected to include my dollar/percentage performance.  The numbers are at the bottom.

ASYS – This is a solar play that made a huge break out last Friday.  It slowly uptrending all day and broke over $10.00 in the last 30 minutes.  There did not seem to be any large volume spike near the end like I have seen with so many stocks on Friday.  The company recently announced $10M in orders, but won’t specify who the buyers were.  I haven’t been doing this long enough to know if that’s odd or not, but it seems like it would be.  $8.75 seems to be the old support and it broke through that rather nicely.  I’ll watch how this plays out and see if it holds $10.00 or if it pulls back after such a large price jump.  I would like to see a bit more volume too.  Only 419k traded on Friday.

DAN – This company got upgraded by JP Morgan on Friday before the open and the stock spiked up pretty good.  It also held that spike and finished strong.  Once again, a large spike in volume at the end as the quadruple witching hour took its effects out on the stock.  They also announced over the weekend they are selling 10 of their facilities to a Mexican firm.  That may put the brakes on me making any trades on this company as I don’t know how that is going to impact the stock.

LNG – A natural gas company that has had a pretty decent run over the last week.  Once again, a large volume spike at the end of the day.  The stock is approaching its old support level here around $2.50 – $2.60.  If it can break over that then $3.00 could be within reach.  No news right now that I could find, so maybe it is playing off the XTO merger last week.

SENO – This company was cleared by a jury in a court case reference a patent infringement lawsuit.  It finished Friday going sideways but with a strong last 20 minutes of trading.  It is well over its 52 week high.  I’ll keep an eye on this for a possible move through $7.00.  Although the volume was under 1M, the volume it had on Friday is not that far removed from what would be considered heavy to move the stock and far above its 3-month average.  It has had only 2 weeks of over 500k shares in the last couple of years, and it did 500+k on Friday alone.

SMOD – Posted better than expected 1Q profit after the close on Thursday and gapped higher in the morning to just over $6.00.  It was able to hold just over $6.00 for the rest of the day.  Maybe look for a pullback in the morning and then another push to break over $6.00.  $6.60 looks like the next point of resistance.

I started this experiment with $10,361.53 and I currently stand at $9,510.22 for a dollar loss of $851.31, -8.2%.