Can't even post results, that's how powerful it is.
I wanted to post this observation a while ago...seems powerful.
10/60 cross happens, stochastic rises...and fails...looks like a super nice fader.
Monday, March 31, 2014
just an observation
Super busy back-testing an automatic trading strategy and trying to swing/scalp it manually at the same time.
Can't even post results, that's how powerful it is.
I wanted to post this observation a while ago...seems powerful.
10/60 cross happens, stochastic rises...and fails...looks like a super nice fader.
Can't even post results, that's how powerful it is.
I wanted to post this observation a while ago...seems powerful.
10/60 cross happens, stochastic rises...and fails...looks like a super nice fader.
Saturday, March 29, 2014
Wednesday, March 26, 2014
First loss for RUS_Trades
Today I lost the first time and there are a lot of things, that should be learned out of it.
I do consider myself "right" on the trade, in terms of technical analysis.
But overall, I was "wrong".
I traded MINE today, which is a penny-stock and super volatile.
I saw some support around $0.031 and as it was going down, I wanted to play the bounce.
Sort of like I played GPRE yesterday, which was pretty successful.
First mistake I've done, was the timing. I did not learn the lesson from GPRE, when I said that the bounce needs to be anticipated and the position could be taken right at the support.
Maybe if it was NASDAQ, I would finally put a limit order just above the support. But this is OTC and I was too scared.
Second mistake I could call the "lack of the right software". I have to switch back and forth between my free trading platform and E*Trade web-site for orders, which is a pain. Stock could be running in seconds, and I'm still entering the order. So instead of getting a fill around $0.031, I got filled at $0.037. Seems like nothing? Well, it's a $60 difference on my position.
Third mistake was the size. The size was way too big, especially for a penny-stock. I could also call it being emotional. I could also call it being under-capitalized. The size was way too big. With smaller size I could have a bigger STOP LOSS, which would allow me to get the profit. This mistake is THE BIGGEST.
Fourth mistake was that I went in and traded OTC for the first time, while I was not too comfortable with it and I have never done it. I could also call third mistake that I did not follow my set of rules. My goal #1 is to stay at the game and goal #2 be consistent. Goal #3 is to make big profits and I just tried to do that my second trading day. Did not happen.
If I was about to summarize everything, I could say that:
I do consider myself "right" on the trade, in terms of technical analysis.
But overall, I was "wrong".
I traded MINE today, which is a penny-stock and super volatile.
I saw some support around $0.031 and as it was going down, I wanted to play the bounce.
Sort of like I played GPRE yesterday, which was pretty successful.
First mistake I've done, was the timing. I did not learn the lesson from GPRE, when I said that the bounce needs to be anticipated and the position could be taken right at the support.
Maybe if it was NASDAQ, I would finally put a limit order just above the support. But this is OTC and I was too scared.
Second mistake I could call the "lack of the right software". I have to switch back and forth between my free trading platform and E*Trade web-site for orders, which is a pain. Stock could be running in seconds, and I'm still entering the order. So instead of getting a fill around $0.031, I got filled at $0.037. Seems like nothing? Well, it's a $60 difference on my position.
Third mistake was the size. The size was way too big, especially for a penny-stock. I could also call it being emotional. I could also call it being under-capitalized. The size was way too big. With smaller size I could have a bigger STOP LOSS, which would allow me to get the profit. This mistake is THE BIGGEST.
Fourth mistake was that I went in and traded OTC for the first time, while I was not too comfortable with it and I have never done it. I could also call third mistake that I did not follow my set of rules. My goal #1 is to stay at the game and goal #2 be consistent. Goal #3 is to make big profits and I just tried to do that my second trading day. Did not happen.
If I was about to summarize everything, I could say that:
- Did not follow the rules in terms of: position size, market/stock.
- Under-capitalized.
- In need of soft-ware.
The main thing is that the size was way too big and the stop-loss was too tight. That led to a loss. OUCH!
The other things do not really relate to the mechanical process of trading. So let's get down to that.
So, I saw the support and stochastics crossover. Seemed bullish as hell, same concept as GPRE.
I wanted to play the bounce, get a decent 5% and exit quick. Sounds simple.
If I set my stop-loss at the support level, I would have TWO opportunities to exit. There were two spikes, and even if I was greedy or super-confident, I could make even a bigger profit at the second spike.
But I set-up my stop-loss stupidly. Look, this is a PERFECT RISK/REWARD scenario here. Oh well.
My second mistake was the fact, that I did not trust STOCHASTICS. That was part of the reason, why I exited. The cross, when I bought, seemed to fail. You can see my exit, right when stochastics fast is about to cross back. BUT IT DID NOT CROSS. It just bounced again and the stock soared.
I love stochastics and this proves to me, that with a REASONABLE stop-loss and rule-following I could have make this my BIGGEST winner.
I'm not going to talk about perfect entry. However, if I exited on the first peak, I would have made 3%, second peak would have been 6%. Instead, I took a stupid 5.93% loss.
I was all happy about "how smart I was with that stop loss", when the stock was going down at that time.
Smart stop-losses are more important, than the entry. All I could say.
The golden rule of trading is "let your profits run and cut your losses short".
NOTHING about the entry.
Tuesday, March 25, 2014
1st day-trading (and trading) day
First day of trading today.
Did not really think, that I would. Got the scans ready, pulled the watch-lists up.
I thought that I would only trade, if the perfect opportunity comes up. I liked that approach, seemed quite effective.
I've had three or four bearish plays coming, but E*TRADE did not allow me to short sell. Screw E*TRADE.
So I was just hanging out, looking at three watch-lists: Deadly, Bullish, Bearish and Russell 2000 for some price action of course.
TRADE#1
I looked at deadly and PLUG came up. I knew how everyone on NASDAQ traded that stock, Russell was going up. I just decided to take a shot. Because, why not? It seemed reasonable, up-trending, indicators, trend and HUGE volume. Now I know, why there was huge volume. Here's the chart intra-day:
What I liked is liquidity, low bottom tails (sign of strength and buyers) and I also knew it would definitely follow the market.
I did not get in immediately (which I really should, risk/reward was on my side), but hey - it was my first trade ever and I wanted to play it safe. Watched the retracement and as soon as the green candle got over the top of the last red one - I pulled the trigger, filled @6.06 with a position worth of $1750.
I saw the very-very top and stochastics being overbought, but I really thought it would run much higher. Well, I gave it some time and "let my profits run", as the golden trading rule says. 2.55% profit. BAM!
I've already said about the ridiculously high volume at the open. Without further advancement. In a falling stock. Clear sign of accumulation. But it was just way too much for me to think of, honestly.
PLUG ran 42% today. I won't count, how much money I would have made, if I did not exit the trade. Here's the total chart:
How tiny of a swing I was trading compared to the late day action....oh well.
THINGS TO IMPROVE:
I regret not buying at 29 or even below. Would have been a much better trade all around.
The stock did not reply to a quick Russell 2000 rebound and that just felt wrong. I sold. That felt wrong for a reason now, I guess. Just a tiny 1.5%, but it's okay.
What I learned today:
Did not really think, that I would. Got the scans ready, pulled the watch-lists up.
I thought that I would only trade, if the perfect opportunity comes up. I liked that approach, seemed quite effective.
I've had three or four bearish plays coming, but E*TRADE did not allow me to short sell. Screw E*TRADE.
So I was just hanging out, looking at three watch-lists: Deadly, Bullish, Bearish and Russell 2000 for some price action of course.
TRADE#1
I looked at deadly and PLUG came up. I knew how everyone on NASDAQ traded that stock, Russell was going up. I just decided to take a shot. Because, why not? It seemed reasonable, up-trending, indicators, trend and HUGE volume. Now I know, why there was huge volume. Here's the chart intra-day:
What I liked is liquidity, low bottom tails (sign of strength and buyers) and I also knew it would definitely follow the market.
I did not get in immediately (which I really should, risk/reward was on my side), but hey - it was my first trade ever and I wanted to play it safe. Watched the retracement and as soon as the green candle got over the top of the last red one - I pulled the trigger, filled @6.06 with a position worth of $1750.
I saw the very-very top and stochastics being overbought, but I really thought it would run much higher. Well, I gave it some time and "let my profits run", as the golden trading rule says. 2.55% profit. BAM!
I've already said about the ridiculously high volume at the open. Without further advancement. In a falling stock. Clear sign of accumulation. But it was just way too much for me to think of, honestly.
PLUG ran 42% today. I won't count, how much money I would have made, if I did not exit the trade. Here's the total chart:
How tiny of a swing I was trading compared to the late day action....oh well.
THINGS TO IMPROVE:
- Never end your trading day until the close. I finished trading and went for a run - at the same time, as PLUG soared on the news.
- Be fully prepared. I wanted to sign up for Investors Underground live-chat for a long time, but still did not do it. Maybe if I had it, I would have caught at least a little piece of that move.
TRADE#2
To be honest, the first trade was a little bit nervous and I really-really did not want to overtrade, so I was just flipping stocks/watchlists/charts as the market headed lower. Terrible volatility today.
Then I looked at the chart of GPRE, one of those stocks from a special scan. It was falling with an early 10/60 SMA cross (there are so many opportunities to trade, I just can't do them all...)...
I paid close attention to it....as it was falling, and falling, and falling.
It had strong support @29. Should have put a LIMIT order there, oh well...
It dipped over $29 for a second and start going back right after. "Bounced".
I got some confidence and got in. In case with this stock, I did pretty much all I could. Did not leave any money on the table. Here's the chart.
I regret not buying at 29 or even below. Would have been a much better trade all around.
The stock did not reply to a quick Russell 2000 rebound and that just felt wrong. I sold. That felt wrong for a reason now, I guess. Just a tiny 1.5%, but it's okay.
What I learned today:
- Placing limit orders at significant support level can improve your effectiveness significantly.
- Trading is 7:00 AM - 4:30 PM at least. No exceptions.
- I really need a trading chat. Should improve my effectiveness dramatically.
- E*TRADE sucks. BLOODY commissions. And I have only one day-trade left with this stupid Pattern Day Trader rule. And I can't even short stocks.
- $3000 is too small to be effective, even with tiny commissions. Definitely under-capitalized.
Monday, March 24, 2014
Counter-Trading Triple-leveraged ETF's
An idea that has been on my mind for quite some time.
Just a thought, if we had a 50k position in both direxion daily gold - DUST & NUGT
Stop loss: 1.5%
DUST Open: $22.1
DUST Stop: $21.76
NUGT Open: $42.34
NUGT Stop: $41.71
This is the entry data with a stop-loss. Let's look at the chart how it would have worked out today:
Well, in NUGT we would be out of the position in the first 10 minutes of trading.
If I had been in DUST, I would exit right now.
Let's look at the numbers:
NUGT: 50,000*0.985=$49,250 or 750$ loss
DUST: 50,000*1.1324=$56,620 or $6620 gain
DAY TOTAL PROFIT: 5850$
Not bad at all.....
Just a thought, if we had a 50k position in both direxion daily gold - DUST & NUGT
Stop loss: 1.5%
DUST Open: $22.1
DUST Stop: $21.76
NUGT Open: $42.34
NUGT Stop: $41.71
This is the entry data with a stop-loss. Let's look at the chart how it would have worked out today:
Well, in NUGT we would be out of the position in the first 10 minutes of trading.
If I had been in DUST, I would exit right now.
Let's look at the numbers:
NUGT: 50,000*0.985=$49,250 or 750$ loss
DUST: 50,000*1.1324=$56,620 or $6620 gain
DAY TOTAL PROFIT: 5850$
Not bad at all.....
correlation is important
New post didn't take too much time to come.
I've picked two stocks for my strategy this morning with a rule - buy at the open.
Seems not too effective, as they tanked along with the market. But look at this correlation.
Notice that little green candle with a huge tail? They appeared on two stocks that have nothing in common.
One tanked 1.5%, the other one was down ~7%. The candle appeared at the same time on both charts.
I think of the two possible ideas from this fact:
1. For every pick, correlation with R2K and NASDAQ should be studied. There is no reason to get down even 1.5%, if the market is going down.
2. Buy at the open seems not too reasonable in terms of the risk. For automated system, buy at the close seems safer. For a semi-manual system, it might be buy 10/60 sma cross, buy with market re-bound or something like that. Stochastics could be used.
UP:
Just looked at the RUT chart - 10/60 sma cross was HIGHLY bearish. Should have taken that into consideration with entering a position. Definitely another component in this problem.
I've picked two stocks for my strategy this morning with a rule - buy at the open.
Seems not too effective, as they tanked along with the market. But look at this correlation.
Notice that little green candle with a huge tail? They appeared on two stocks that have nothing in common.
One tanked 1.5%, the other one was down ~7%. The candle appeared at the same time on both charts.
I think of the two possible ideas from this fact:
1. For every pick, correlation with R2K and NASDAQ should be studied. There is no reason to get down even 1.5%, if the market is going down.
2. Buy at the open seems not too reasonable in terms of the risk. For automated system, buy at the close seems safer. For a semi-manual system, it might be buy 10/60 sma cross, buy with market re-bound or something like that. Stochastics could be used.
UP:
Just looked at the RUT chart - 10/60 sma cross was HIGHLY bearish. Should have taken that into consideration with entering a position. Definitely another component in this problem.
Tanking market Monday open
Feels good to be out of the position on TIBX with this volatile market. That was a perfect call.
As I said, "In my opinion there are plenty of sellers that would be willing to dump their shares, if the stock opens over 22."
That was the case...
RUT is tanking harder than Tibco, doesn't have that $21 support level.
Hasn't been so red for two months. Oh wow.
While this market does not affect me financially, it certainly affects my system that I'm testing. One of the two picks tanked 7% already. And that is GOOD. Have to make some adjustments, as better entry and some safery net.
Getting the money from the TIBCO transaction tomorrow. I was thinking of re-investing it in my new strategy, but now it seems a little bit too risky. Will see.
As I said, "In my opinion there are plenty of sellers that would be willing to dump their shares, if the stock opens over 22."
That was the case...
RUT is tanking harder than Tibco, doesn't have that $21 support level.
Hasn't been so red for two months. Oh wow.
While this market does not affect me financially, it certainly affects my system that I'm testing. One of the two picks tanked 7% already. And that is GOOD. Have to make some adjustments, as better entry and some safery net.
Getting the money from the TIBCO transaction tomorrow. I was thinking of re-investing it in my new strategy, but now it seems a little bit too risky. Will see.
Subscribe to:
Posts (Atom)