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 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.

Watch List Update

I’ve been having some issues here at home today.  Our network in the house went down after the close of trading.  Then Cable One internet went down after I got the network working.  I thought I had done something to the internet and wasted an hour shutting things down and rebooting the system.

We are hosting our neighborhood Christmas party tomorrow night and we have been putting the finishing touches on the house cleaning and decorating as well.

So, I’ve been running in circles tonight.

I didn’t get my watch list done last night because I fell asleep on the couch.  Seriously.  I started a fire, curled up with the wife and fell asleep for a few.  After I woke up, I knew I wouldn’t be able to do a watch list and just bagged it.  There is so much time spent doing this that I think it sort of caught up with me last night.  I don’t understand how Tim Sykes, Michael Goode, etc do this full-time everyday.  I was beat last night.

What I’m saying is I am not doing a watch list tonight or tomorrow night.  I just don’t have the time tonight and will never find the time tomorrow with the party.  I will post a trade recap for the week after the close on Friday.  I’ve been writing it as I go along this week.

My dumbest trade of the last two weeks occurred yesterday and so far I’ve been lucky as it is holding steady.  I’ll recap that one.  I also sold LZB this morning.  It really looked like it might break through $11.00 with strength yesterday so I held it.  When it failed late yesterday and didn’t really spike this morning I got out at $11.05ish.  That, clearly, has been my best trade so far.  Especially after the way it finished this evening.  FNM and FRE are both a close second place.   I spotted both of those on my own and made decent profits on both.  I’m still losing more than I’m winning though.

I filled out my Cy Group application and spoke with Stan in the chat at IU on Monday and Steve at Cy Group on the phone today for about an hour with questions about the technicalities of the platform and questions about the application.  He had great patience with me and was able to answer all my questions.  I’ll try to get out a post about that over the weekend as well.

I have been spending all my days this week in IU’s chat.  Learning a lot and missing a lot.  Missing trades because I’m a little gun-shy.  Today, I actually had my trade ready for DCGN when it was alerted in chat.  I had a limit order ready at $.105 when the ask was at $.1035 before it took off to $.30.  I just couldn’t pull the trigger because I had two other trades running and, quite frankly, I was scared to do it.  You always here people say, “Keep the emotion out of it” and I can not tell you how hard that really is to do when it’s your limited money on the line.

Anyway, that’s where things are right now.  I haven’t counted my money, like the song says, but I know I’m still in the red.

Watch List for 12-15-09

I screwed up with my last watch list.  I forgot to list a couple additional stocks that I was long last night.  Both FNM and FRE.  I bought them going into the close on Friday on mid-day news about Congress passing HR 4173.  I was alerted to this on CNBC and watched as both stocks spiked   Once I saw that both held their volume and price I bought them for an overnight trade.  I realized I missed this in the my watch this morning when I got up.

ANX – I bought this into the close on an alert inside the chat at IU.  It’s being pumped and should get a bit more out of it over night.

BEE – Nice move yesterday but its volume was just average by historical standards.  I’ll watch how it deals with the $2.00 mark and see if volume picks up any.  Looking back at September, the big moves took 10M and 15M, yesterday was still around 2M.

FNM – I am still holding FNM because my price target hasn’t been met yet.  I nearly got to it so I’m holding it one more day.  I didn’t really want to hold this two days because both FNM and FRE are basically dead companies.  I only bought them on the momentum of the bill’s passage.  I figured I’d get a little spike out of it and it was a pretty safe trade.  But they are both like TLB from last week.  Not something I want to hold long.  I’m just happy they were a stock I spotted and moved on without any outside influence.

LZB – Still long here.  It moved over $10.50 today in the last few minutes of the day.  Great chart today.  I kept waiting for a pull back and never got one, which I’m happy with.  One more day like that and I’m happy.  Course, I still expect to have to hold it a few more days, but that’s okay.  I have a real comfortable chair to watch it from.

MSHL – This is another alert from IU.  They have drug news coming out on Thursday.  If you look back over the last year, each time they have had news there’s been a little spike.  January, July and September.  The spike in May has no news related to it.  Today was the second day big move.  I’ll be watching this on a daily basis for more trending and get out at the first sign of weakness.  I certainly don’t want to risk holding it in case the news is bad on Thursday.

XRM – 25% move on Monday on increased volume.  The only news I found was their own press release and a notice of delisting.  Interesting.  Have to check my email for other news.  This is the kind of move I’m trying to spot.  Something that is just starting to break out after a one day move.