"Buy into the rumor, sell on the news"

That quote is just one of the many things I've picked up about trading, yet never verbalized. I intend on writing my notes about stocks down in post very soon. I also hope to do a post specifically on finding the stocks I trade. I've got an arsenal of sites to check- just click down my blog roll on the right side of this page, but I find my own stocks just in case. For example, I found FRZ on the first day of the run up on 10/22/08. I said I'd play short or long based on morning action and indeed, the run was not finished on 10/23. Nevertheless, be on the lookout for these posts.

Next, there is absolutely no way you can expect that I not traded this past week I haven't posted in. Yes, I did have two midterms, but I've been trading plenty.

First was my CRDC short. I took the hit at the top of its bounce and covered. It was my mental stop price and I just followed my rules expecting it to continue the rally. If you've check recently, It hit 5.75 recently. My short was from 6.72. Could have been a nice 1k profits, but I've learned that thinking about what you could have done in the stock market is the biggest waste of time.

I took the hit in my account, and set my eyes on TRE and soon LVLT. I bought TRE on Friday on a vol spike. It had a multi-day run down, and I didn't mind holding o/w(over weekend) on it. After all, only a mining company. Funny thing is, i've been buying and selling stocks very often without checking what the company is even about. My technical analysis is getting better and better the more time I chart with moving averages on TOS. Like my buddy Gio said, 10/60 and 20/50 is really where many traders make their decisions. For me, its an instant way to tell where the market is heading. I have also been admiring how eloquently as a whole the market makers will time buy/sell volume spikes so that EOD buy-ups and sell-offs can happen in accordance with the 10/60 sinusoidal pattern.

Anyway, TRE was played long and again I took a hit on this one. It went my way immediately, almost breaking 2.0 from my 1.91 entry, but since it didn't hit my price, I held. Eventually I couldn't take the pain at 1.70 thinking that shorts would force it lower so I got out. My account was below 6k for the first time in perhaps a month. Simultaneosly I bought into LVLT at close friday hoping to get in on this breakdown rally. When stocks fall this quickly, its very easy for the momentum to overshoot the true price of the stock. For that reason, I bought into EOD momentum and closed Friday with a loss, but if you saw it almost take out 1.40 today, you know why I reloaded EOD at 1.20 with more shares. This ticker is a good prospect for me. Big thanks to Laura, chat goddess of GOTS, for the alert late Friday.

The end of CRDC and my newfound Confidence.

I exited CRDC yesterday and took a hefty loss. It was actually during a midday boom. Though I commented on the sinusoidal pattern and could have guessed that it would eventually collapse, I was following my mental stop that I set at 7.30. As it approached my mental stop it was picking up vol and was looking bullish. I want to follow my rules so I took the exit even if its for a loss.

Its strange, however, this loss has given me confidence. Today, CRDC gapped down and never met 7$ again. More than ever, I am understanding price and volume movements, and really using sector stocks, DJI, and moving averages. One thing I noticed from reading blogs like Yng and DV, is that while i've learned these general skills that I can use on all kinds of stocks, I haven't really been picking up on single stock patterns. You know, things like how ABK(one of my most talked about tickers) reacts after gapping up, or what failed 10/60 crosses do for it. Yng recently made an awesome gap up play with TMA. Definitely what I call easy money. Its these kinds of patterns i'm going to try to start noticing.

FRZ is my short watch tommorw. Volume is there, and its been hovering in this price range since early Oct. Just bouncing up and down in the 1-3$ range. Of course, if this run isn't over, I'll go long too.

NKTR- has a lovely multiday run and check out today chart. Solid "sideways action"

Greed.

CRDC was just frustrating today. When the BID falls to 6.33 but you can't exit becuase the ASK is still 6.99 you start to realize just how manipulated some of these stocks are. I don't know who is behind it, and I could list all sorts of conspiracy theorys about how this pump happened, but I probably still would not nail just how low manipulators are willing to go. If you're not convinced, read TIMS post on a real life stock manipulator


I noticed that CRDC is very sinusoidal relative to 60 day MA so i wasn't THAT worried when it tried to break 7.10. I told dhous i'd cover in the crash. Greed got the best of me. Only a 110$ gain and i've been holding this stock for over 5 days? No way, I wanted more. Thats why I held, even when my trade was green, and thats why i'm stuck here at the 7.07 close!

I'm making a promise now, because this stock is no longer worth my time or capital. The net dip, ,no matter whether I'm green or red, and i'm out. I could have played TMA, ABK, or RDN if I just had some capital today.

I'm really not dissapointed in myself, becuase my reserach tells me itshould be going down. But i've learned from this experience that illiquid stocks are not worth the huge bid/ask spread, and multi-cent lunges in price they take. Further, like i said before, something is up with this stock. Just look at the volume spikes. The daily shares traded is not much at all, so when the volume spikes, the market maker is the one moving in my opinion. One last reason I think this stock is up to no good is becuase the bid/asks are always teasing investors. Often, they don't surround the LAST. Imo, market makers are just testing the people in the trade to cave in and surrender their money in the extreme squeezes and sell-offs that keep happening- thus the sinusoidal leading line around the lagging line.

But honestly, no one should trust sell-offs and booms in illiquid stocks! This thing is definitely long run RED. I just don't have that much time.

A bittersweet EOweek

I'm going to cancel posting the positions traded up here. I've decided to start keeping an excel spreadsheet with these stats so I can get percent stats much quicker. Since I'm trying to use my trading as part of my resume for getting trading internships/jobs, i'll need to start keeping track of these numbers.

I was way to eager to trade after Wednesday. My account was at an all time high, and I had two day trades left for the week. I forced trades for the rest of the week. Tried to reshort PNX and got a quick lesson that it wasn't ready to break 5. I held an o/n on RAMR out of desperation to trade. Luckily I didn't not go bankrupt on this trade. I don't know what i was thinking. RAMR!! A 1$ stock with no volume! I could have taken a big hit of someone decided to do some manipulating. I started early Friday with CRDC. I shorted off the top and saw some nice pitfalls. But the spread on this stock is horrible and again, I saw how ugly low vol stocks are for small accounts. Muddy was able to take it when it begged to break 7. I was even willing to give up a hard earned 400 more on my short before I called it quits. I've really gotten a feel for movements in price and resistance. My EOD fade that i told dhous and Andromeda about came through just like I said. I think the downside will come Monday since it didn't crack 7 on friday. Not to mention, there was the DJI fade Friday.


I'm proud of how I stuck through the losses on CRDC Friday. I saw my target exit and when things didn't go my way though I considered covering for a loss. I checked my reasons for entering and saw that this junk company had not yet delivered on rumors from sept. 11. A buy offer is not up for discussion, and from bid/ask it looked like the market movers were just begging people to raise the price. IMO, theres some manipulation in this stock. They didn't get me to fall for it. Of course, this could all change monday. I do real-time analysis on price/volume and sectors. I need charts, and I need to get a feel for the moving averages. My biases call on CRDC is way down. What will happen monday is what I will react to.

This is my first weekend hold. As dhous reminded me EOD, at least we saved a day trade! Now for a picture.



I entered pre 10/60 cross #2 of the day. Saw some quick quick money, and wanted more. I held through the squeeze that turned into a solid attempt at 7. Decided that it was a good fakeout by some shady market makers. Saw confirmation when the huge red drop happened at the red circle. Decided the EOD sell off wasn't enough the second time it happened either. I'm confident about monday.

P.S. Covester is really being strange recently. It seems like the percent gains are always wrong, but I know they have the right information on my trades. Noob just made the Covester rankings list making me really hopeful that they may add me as well. I emailed Blain Reinkensmeyer about being added to the rankings to help my resume, but I have to have two months experience. Fortunately, they will calculate my Sharpe Ratio for me on the 24th so I will be able to place myself in the rankings unofficially. I'll be sure to post here when I find out.

My new oversleeping story and the end of PMI

Positions traded:

PMI o/n long @ 2.14, close @ 2.57

+$730.57

$6932.48

I woke up late for the market today. Well, considering I went to bed around 5AM, I should have seen this coming, but my wake-up was a great place to see the chart action. Had I been awake at open I might have been spooked by the quick small sell off. I've seen this happen too often. Especially after my RAMR o/n long a few weeks ago. After checking my Itouch in bed to find the Google finance(delayed) quote, I casually rolled out of bed to see my account steadily over $6900! When I when to bed, I was in $6500. The euphoria quickly settled into concentration. I was very calm and reasoned through my options. I was expecting a gap up, but quickly saw that ABK,DSL, XLF, and FRE/FNM had all fallen at open. VERY STRANGE. I always check related stocks for guidance on entering and exiting. Thats when I realized I didn't care what the 10/60 was doing. I saw it testing 2.58 and set my sell limit at 2.57. I was out with a solid profit, and had made my second biggest gain just minutes after rolling out of bed still not having showered or brushed my teeth. It was a great feeling. For the rest of the day, I curiously watched it and found out that PMI had maintained a great credit rating in the recent mess. This, i'm sure, was why we didn't see it sell off at open.

Nonetheless, I now have an awesome story about oversleeping with my o/n position in the gutter of the market. Hooray.

Resiliance with PMI

Positions traded

o/n long on PMI @ 2.14 1700 shares.

closed at 2.33

I saw PMI at 2.12 about when I rolled out of bed around noon. Having missed the morning of trading and the morning GOTS chatroom I was not planning on trading. However, the setup was great. After a huge gap up, the market covered and shorts joined the quick morning sell off. It was just stabilizing in low 2 teens and I saw that the 10/60 was set up for a rest of day uptrend. I pulled the trigger very instinctively and felt good about having done so. I got my fill at 2.14. After little action all day, I knew EOD would decide my fate. It looked like shorts had yet to cover so I wanted a squeeze. Imo, this is exactly what we saw EOD--though, DJI & XLF had great EOD breakouts as well. P/L YTD is around 192$ and P/L day is @ $305. I have highest yet unrealized gains for my account, but of course, they are not mine untill I make a closing trade.

I look forward to tommorrow.

Friday's trade. A bad start to a great weekend.

Positions traded
PMI long 2K shares @ 1.91, sold at 1.86.

-$112.99

$6221.89



I really shouldn't have traded Friday. Especially after I realized the potential for each trading day should not be measured by the number of day trades I have. I went long on PMI. Why? honestly I spent the morning scolding myself for not pulling the trigger on trades fast enough. So when I saw a nice 10/60 cross on PMI I went in. I went in 2k shares. In other news, on both of my trades last week I lost $112 and some change.

Interesting convo with Yash on the way back from ATL today. He proposed a negative rate on the part of the FED, as a possible solution. Very interesting and something I would not have considered. Of course, its ironic that I read an article that said the NYC debt clock would need to have additional digits added after it maxed out.

This is going to be a good week in terms of time set aside for trading.

Rate Cut

Worldwide cuts in the Rate were supposed to save us from our second crisis of the year. The mortgage crisis was the cause of the lending crisis, but nonetheless, this is what REALLY shook up the American problems into something that went worldwide. A global initiative cut rates by 50 basis points in about 8 countries, but remember, this isn't to encourage consumers to spend. It is really to encourage banks to borrow and provide lending liquidity. Inflation is still around and we are deeply in a recession.

This, folks, is the dreaded stagflation.

It DOES matter that the vast majority of American's won't realize whats going on. But who cares right? If you don't understand it now, your children will explain this entire crisis starting from the 1980's through now to you when they take ECON and HIST courses in the future.

In the meantime, we(average Joe's) will all whine and moan about our shriveling nest eggs saying "This is ridiculous." just about every other line in our highly intellectual and researched soliloquies on the current state of the economy.

What a terrible trade today

Positions traded:

GGC
Short 1500 shares @ 2.82, cover at 2.90
$-112.76

$6340.43

I came into the day knowing I made a shitload last week and that after a huge Monday drop the markets would be very testy. Sure enough the FED responded by writing a plan to buy up short term debt and offering rate cuts. Honestly, rate cuts a while back might have helped the credit freeze we are in. How else were the markets to remain liquid with so many failures?

So... what did I trade. I played GGC today.GGC was a huge supernova. It went from 2.12 to 3.25 almost uninterrupted. I wanted a piece of this easy money so badly. Of course, with easy money in a stock like this comes lots of manipulation. A stock that moves like this on 0 news has shady traders involved. Slotmonkey in the chat room was talking about his position and then gave an "OK" to short. I foolishly listened. After missing the short above 3, I chased down to the 2.80's. I got a fill at 2.82 and it didn't even come back near it for the rest of the time I was in. It was between 2.84 and 2.88 for a good bit then it hit 2.90. The chart looked like it could rally off the dip and I didn't see this action to be squeezing so I made my exit for a loss. My exit was not a problem. The fact that I entered this trade was.

Really, the potential for a trading day should not be measured by the number of DAY TRADES I HAVE!!!! This is something I need to fix. Also, I need to stop watching Net Liq on my trades. I forbid myself from doing either of these from now on.

today was horrible. DJI was not moving with the penny financials and I really just rushed this entry.

On the economy as a whole, I can't call it, I can only react. Shorting bans are to expire soon. The FED & SEC will make their decisions and I, as an unofficial daytrader, will have to comply and react. I do want to make it clear while Wall Street was unregulated in this crisis, no one has the guts to blame the Americans who bought mortgages they knew they couldn't afford. Should not they be regulated as well? Just something to think about all of you that are throwing the blame around out there.

Saturday Notes

Interesting read on BeatTheMkt's Covester account.


If someone is going to teach you to trade, or you are going to invest in their fund, they should know the answers to these questions.

1) What is the accuracy of profitable trades for the system?
2) What is the average profit per trade for the system?
3) What is the average loss per trade for the system?
4) What is the average, largest drawdown in a win or loss?
5) What is the most consecutive wins and losses?
6) Can two people interpet the methods differently?

I've read a lot about hedge funds, and I have never heard of this being discussed. Granted I don't have a few million to throw into a fund, and these are all serious investor related questions, with hedge funds collapsing like Amy Winehouse after every overdosed stage performace, these are important statistics!

I've had huge gains since I started trading about one month ago. I need to digest it and not become one of the 90% of traders that lose money. When I spoke with one of my serious trading partners, Ben, yesterday he advised that I sit out of trading to digest my gains. My gains recently have been very very large in terms of percentages and getting cocky in these markets... well... you can easily be humbled. For my niche, there's an extent of luck in each trade. Its very volatile, its dangerous. You stand to lose it all. Being up 32%, is a big deal. I'm more cautious about losing gains than principal, so you can bet this little hobby of mine has become that much more serious.

This summer, I used to read all of Timothy Sykes's testimonials and just imagine the numbers and figures he'd throw around. People would make $200,$500, $1000 plus everyday. It's hard to digest that I've become one of those people.

COVESTOR NOTES

I just wanted to clarify some notes on my covestor account. The covestor account shows %returns from an initial account valued at $4736.99. The returns, therefore, are skewed. My actual starting account size is $4900.

BKUNA!

Positions traded:

BKUNA
long at 1.02, sell at 1.25
+$350

$6473.11


Awesome trade with BKUNA today. I've been hard on myself when I execute bad trades, so you can bet I'll point out why BKUNA was very well played.

I got out of a morning exam at 9:29 AM this morning. Like Laura told me, waiting until 10:30 before entering a position is a good way to get a feel for how things are moving. Plus, in my opinion, you've got a good bit of chart action that can help you for some technical analysis. Before entering BKUNA, I checked out the VIX(fear index) and DJI. I noticed DJI was ~ to penny financials for the day. When you see this early in the morning. Definitely exploit it for the day. I saw a DJI spike while BKUNA was flat lining at 1.02. despit having a solid run in the first hour of trading, all of the signs were there and the DJI just did a nice angled 10/60 cross. I pulled the the trigger. I was quickly 1500 shares in. I checked out if the GOTS chatters were interested in shorting. Terri quickly pointed out it was on the short ban list. ALL SYSTEMS GO. I was now confident enough to walk away and go pickup my new speaker system. I returned to find the stock where I left it... trying to break resistance at 1.10. The DJI was still channeling upwards so I held. I saw the lagging line(I don't know if everyone calls the 60 day MA line a lagging line, but thats what i'll call it. The 10 day MA is the leading line) reaching a peak and considered exiting. I had a solid $150, but the bailout was just hours away. I held. It fell. I got nervous. I reminded myself of all the signs, and continued. As the bailout grew closer and closer it shot up. I didn't even realize it at the time, but this was a $ stock! It was breaking key price points at a very high rate. I'll need to pay more attention next time. The percentage gains were huge. I finally realized around 1.27 as my account broke $6500 in net liquidity. The fact that I realized this at the time is a good sign in retrospect. I really am learning when to exit! After i exited at 1.25 right before the bailout vote was finalized the stock shot to 1.29 and then fell slowly but surely. I had a great exit!

Size of position was a modest bet, but seeing as all of the good signs were there I easily should have done double my position.

One thing I did not do correctly was place the sell limit at the right price. The LAST was showing 1.27 but i put a sell limit at 1.25 since this was the ASK price and thus lost an easy $30.

This is something to improve upon, though i'm very happy with my trade.

August/September in Review

Yng has a nice habit of posting his monthly stats up and I think it would really help my trading If I could pinpoint costs, bad habits, and highlight good trades. So... I will do my best to recount what the months of August/September were like in terms of trading my account.

August was my breakout month. It wasn't very eventful.

August:

Starting account value: $4900
Ending account value: $4855.61
Total loss: $44.39
Total loss (%): 0.9%

Total commissions paid: $30.03

Total # trades: 2
Total # winning trades: 1
Total # losing trades: 1

Positions held long: 0
Positions held short:2

Largest winning trade: $1
Largest losing trade: $-59.40

Total # trading days: 1
# green days on account: 0
# red days on account: 1

September:

Starting account value: $4855.61
Ending account value: $6147.64
Total gain: $1292.03
Total gain (%): 26.6%

Average daily return: 0.887%
Average daily P/L: $43.07
Total commissions paid: $376.17
YTD commissions paid:$406.20

Largest winning trade: $992.40
Largest losing trade: $-146.88


I hit some lows during September that you don't see in the above statistics. It was tough. At its lowest point I was down nearly $300 to $4629.94. My trades on RAMR and SIL helped bring me well out of the red.

Bloomberg

I don't know why I didn't go earlier to check out the Bloomberg Terminal at Park Library in Carroll. This thing was sweet. I don't see it being of huge use to a pennystocker, like myself, but seeing the big firms that had huge holdings on the stocks i've traded was just the beginning of what this machine has to offer. I was getting a news feed just like ticks on a stockprice on the news page. Tons of gossip, spam, and perhaps a bit of honest truth just flying across the pages while also getting the MOST real-time stock prices I can get at the moment. TOS doesn't have shit on Bloomberg.

Of course, I have no idea how to use the damn thing when I get there. Sitting in front of it and marveling at the fact that I get to use two screens for trading is enough for me. The student librarians didn't even know what it was. So... I got to talking to the 60 year old librarian who knew more than what it was called. I think the lady thought it was funny when I asked her if anyone even used it. According to her, "we have a full class on business journalism." Fantastic! They pay 2k a month so all the kids can gather around 1 terminal and see news scroll across the screen faster than methed up bunnies multiply. In any case, I'm not complaining. I think i've found my on campus trading hub. There are computers, the library is very nicely lit, computers, journalism majors, and a fucking Bloomberg machine. The only thing missing is a live CNBC stream.

If the senate knows whats good for them, and they should after monday, the bailout should be passed on this evening for a $DJI rebound on the 'morry.

No trading today. Maybe not for the rest of the week

I hate politics. Its one of the reasons I never meddled deeply into forex and I vowed not to become too involved with the campaigning thats been going on. Unfortunately, Cameron reads CNN politics like I read the NYT Business page. He alerted me to Mccain's attempt to cancel his debate, and the ugly interview Palin had with Couric, the rest of which is online now. I ended up watching the entire thing and quickly realized just how important it will be for Obama to win this election. I won't rant on Mccain/Palin. In my opinion, they make it way too easy to.

Also, I love my covestor chart for black monday. Btw, shouldn't we come up with a term thats darker than black to describe mondays. Seriously, we've had 2 in the past month, this is getting old.

Last bit. Check out this cool article highlighting the job of specialists in the markets. Specialists have the unpleasant job of being buyers in a bear market, or like monday... a huge sell off. Pretty neat how the internet and information exchange has allowed so many more players to enter the market that sell offs like this can even occur. Think about when there wasn't a live video feed to congressional votings before traders reacted. According to the article we could have seen a 1000+ point drop.