Random Walk? I don't think so

Technicians don't believe in random walk theory, but it makes sense because stock prices do go random all the time, only in very small scale. Big price movements are driven by factors beyond randomness, such as earnings and economic news.

So there you have it, my rules of thumb is, random walk works when one is looking at 10% of the daily ATR, but beyond that price is driven by the trend and other factors.


shorts:
longs:

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Psychology of Trading, My Thursdays

For some strange reasons, I have been hugely profitable on my forex trades on Thursdays and Fridays since the week of Nov 19, I would round up with 400 pips of wins by the end of the week, had I not made any trades from Monday to Wednesday.

I wondered why, it was all accidents that Dubai happened or just luck that US unemployment rate was much lower than expected? Or I was able to "sense" the right move on right before the weekend?

I also found that lately I have been able to read the 30 min charts very accurately, it was like all of sudden everything started to click again.

Trading could be a hap-hazard job if one decided to go along with luck rather than analysis. But if I become a full time trader, I need to be able to nibble and also need to get some home runs.

I was able to pick the last USD/JPY up-swing, and this one too. I also learned that the close-all trades feature is very useful on the FXCM platform.

For stocks, it is too easy, because the market trend is driving everything else, in other words, bullish trades make money in bull market, bearish trades make money in bear market. Bull market is when SPX made a 3 weeks high after it made a 3 months high. Lately it has been sideway, so the entries are made on the market support and the exists are made on the market resistance. However you read the chart it is up to you.

Last but not least, trading is like driving a car, you will learn how to drive in a very short time. But your instincts were trained over a long period of time, and you will be better as your experience accumulate. I can't explain my instincts, I can't explain the fact that I could not sleep sometimes when I have trades open, only to find out that they were losing trades the next morning. I can't explain that I was able to be on the right side before dubai and after the unexpected low unemployment rate. But it all adds up from the articles I read and from the charts I follow.

Best of success everyone and don't look for stock tips.

shorts:
longs:

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2 1/2 years later

It was two and a half years ago that I signed up with IT. Since then, I did not get laid off. We bought a time share in Colorado. I've got my PMP, but will let it expire. My 2nd son was born.

I have always been very book smart, I can memorize a lot of material in a very short time. Making sense of all those technical indicators, the option Greeks and all to terms was a breeze. But when it come to applications, I failed. I know how to be one shot wonder, like taking tests, but running a marathon like trading, it is my Achilles heels.

I have now came out from the struggle and follow the market, don't read too much into all those information, stop using indicators, and treat every trade equal. Last winning trade has no bearing to the next one. It is not like making past 1st level and move on to the next level, they are all same level.

I am no smarter than the market, but to make money all I have to do is to follow the market. Just don't try to out smart it.

shorts:
longs:

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dollar index to hit 74?

My friend out in the west had brought this predication from an article. By then my short dollar trades: long EUR/USD, long AUD/USD, long NZD/USD, short USD/JPY and short USD/CHF are in pretty good profit. I entered them on Monday...about 4 days before this article was published. And when dollar index hit 76, I was ready to close them out.

By chance or as always, there were some articles published about the dollar is weak and will get weaker, and another article about a conspiracy of selling dollar. Nonetheless, it is time to get out.

The point is, news is always LATE. Larry Livingston, aka Jesse Livermore, stated that already. Don't worry about the news, price movement preceded the news. So be mindful when the news comes.

remember: Price Active discount everything. Everything is anything and everything.

Just trade the price, not the news.

I am still bullish for the equity, especially for commodities and energy related. But again, by the time you read this blog entry it is too late. If your thing the bull run is not over, you can get long, but if you think the bull run is over, you just need to plan for your next action instead of jumping in.

shorts:
longs:

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It is a bull market

Needless to say, Alcoa's earnings report gave bulls another shot. if I were an Elliotian, that seems like it is the start of Wave 5 motives. But I am not, I don't believe in any technical indicators..well anymore.

My Technical Analysis conclusion today is:

• Price actions discount everything.
• Elliot wave counts shifts.
• Go with the flow.

My fundamental analysis key today is:

• Look for the signs, news and accumulative mood.

All the experts in big money firms already told their traders to place the bets. and it is going up. So just go with the flow, i.e. look for the trend and follow it.

shorts:
longs:

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I've got to put this up.

shorts:
longs:

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Where to place the stops?

Since I am so convinced that this is a bull market:

I have no stops these day on all of my stock trades.
my options has a limit in place still no stop

This is not dangerous, but getting back to basics.

1. Technicals are all driven by fundamentals
2. I have decided to be a trend trader, meaning I would rather take some significant fluctuations than being stopped out and see the stock make another run.
3. THE MOST Important information of a trade is TREND, support and resistance are not even close to second.
4. Swing trades are too busy for me.
   
5. Big movement takes time.
   

There you have it.

shorts:
longs:

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Spanish schoolhouse pta. It is No difference from the scenes from the Starter Wife. They have parents volunteer opportunity too, getting alot of free labor.

Spanish schoolhouse pta. It is No difference from the scenes from the Starter Wife. They have parents volunteer opportunity too, getting alot of free labor.

to unload or to scale out

Seeing the price action of crude oil on Friday, I am on the fence now.  I am not as convinced that the upswing on SPX weekly is still intact. 

USD strengthened since Friday, and so did JPY for a week now.  Those don't usually goes with the equity, but correlations are always lagging pathetically.  I just want to focus on the price action alone.

I am not sure what to do on Monday, let me make up my mind tonight and work out the plan.

this is how I feel, all the mistakes and their cousins follow

I have been kicking myself for missing this earning bull run since since S&P retraced 33% from the correction starting 6/12 to 7/10

By that time I was already all in cash for swing trades, looking for the a pull back for a bearish entry initially, but then looking for a pull back and a bounce for a bullish entry.

As I could not make up my mind, I start going through the bloggershperes. Reading all the opinions; some bulls, many bears. And I went back to draw trend lines and heavy duty technical analysis. This does not help, it does not help my confidence nor allow me to think clearly.

So I have been sitting on my hands, not making any trades. It gets to me when I see the equities that I got stopped out, rebound and make a huge run. Here is the tough part, I decided not to chase the trades, and the trades took off.

My wining streaks were very simple, get it with the broader market and stick with the relatively strong stocks. Don't need too much of price level, and trend line. Certainly don't need other people's opinions.



shorts:
longs:

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why good bye parker chase

Hi Zoe,

Overall we like parker chase, it is nice and caring school. Teachers were very attentive and dedicated. M went there when he was 2 yrs and 9 months to 3 yrs and 8 months.

M did not want to go to school because we had a new baby and M wanted to stay home with the baby and Mommy. Secondly M is a very picky eater, so he would leave the lunch table without touching the food, and it is hard for teachers to force him to eat. As a result he is getting skinner and skinner. Then we got a feeling that M was very bored too, I used to pick him up after work and I will see him playing in his world and other kids playing around him with the same toys. On top of that M's best friend screamed a lot in the playground, and M picked up the habit too, we did not like it. Finally, my wife also wanted to spend more time with him.

We did not have any experience with infants, so I can't say much about that.

Let me know if you want to know more specifics.

/Zipper

Using Weekly candles

I trade off Daily candles, the idea of using weekly candles when I started to subscribe to marketclub, because they use weekly triangle for weekly trading singles.

first off a disclaimer: I may be endorsing marketclub.com here, but I don't get any money from them as of June 2009.

To look for trade setup I like using weekly candles on a 9 mos or 1 yr chart, because there are a lot less swings on the weekly.

watch list:

1) stocks trade above 500,000 per day

2) prefer stocks > $20 per share, including ADR's

entry requirements:
1) marketclub score +65 or above
2) marketclub green daily triangle on the day

stop:
1) initial stop use the weekly chart for stops
2) subsequent stops use the daily chart, when a confirmed bounced occurred (close above the high of the low day).

target/exit:
no target
exit when
1) stop triggered
2) very happy with the profit and able to tell my wife knowing she will say "good job honey"
3) score suddenly goes below -65, that should trigger the stop

example one:

AAPL

marketclub chart, weekly red but +75 looks pretty good to me with a green daily on Friday

prophet chart

1) retrace 50% to last swing,

2) uptrend still intact

JPM

with +75 in marketclub, it is good on the number

but looking at it on the weekly chart, there is no confirmed bounce, this week the price did not close above the low week.

GS

with +65, and a green daily on Wednesday at $144

prophet chart, confirmed bounce, on this pull back to 38%

shorts: none
longs: JCP, UCO, WLP, BIDU, BNS, AKS, AAPL, GS, NZD/USD

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Should've check them out first!

check out this site:
http://www.informedtrades.com/trades.php

Free intro courses. Very diligent guy.

Gave me second thoughts of joining IT, of course I would not know what I wanted back then.

He also follows marketclub.com, the trading triangle method, which is part of my business plan, later in my life.

shorts:
longs:

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Re-count GLD, Bearish movtives

Well, GLD failed to make a higher high, and broke the low. Now there is my new count, bearish motives.



I used DZZ, bearish Gold ultra short, and GLD PUT 78/83 vertical.

Still very curious about the move on Steel, but reason will come, I am pretty sure about that.

So I got long on X and NUE, using stocks and Call verticals

Closed my RIO and ILMN trades today, finally a couple of profitable trades. I was ready for the rocky movements because there are both in a minor a-b-c movement.


shorts: GLD
longs: X, NUE

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Gold Wave 5!

Gold wave count



But I don't see any trades for the Gold Miners, GG, ABX and NEM. I will stick with DGP then.

Trades I like

I was too busy at my 9-5 for the last 2 weeks. Did not find too many opportunities because I did not go through any charts.

Couple days ago, we've got the check for the time share that we rented out. Naturally my wife and I discussed about it, and the conclusion was that we want to make money without doing anything! Just like renting out a time share.

Over the week end, I did some research and found one more close end ETF,
EOD -- Evergreen Global Dividend Opportunity, it pays 0.50 every quarter.
I open a position this morning and looking forward to the next dividend date at on April 1.

Trading is fun, but if I can live without trading, I will.

Anyway, I am still in AMZN, and RIO, the longest trade I even hold this year, did not hit the stop nor hit the target.

Today I added ILMN.

shorts:
longs: My life, ILMN

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AMZN over the weekend

AMZN popped up on the searches, and it looked just fine.

Trident numbers counted the big gap from the earning announcement. I think it will follow through, but not for very long.





shorts:
longs: AMZN

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Ok, I like to be on the edge

Made a mistake by moving up the stop of MOS, and stopped out pre-maturely.

So re-entered MOS (you can find the charts here ) and his cousin AGU.

Here is the chart and Trident levels for AGU


Trident Levels:


entered and profited from the short USD/JPY, still short GBP/JPY and long EUR/USD

Once again: Trade small

shorts:
longs:

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Dunkin!

Contrarian I am

Usually I post at the end of trading day, because I trade off of the daily charts, but at this point I am on the side line, except for the TBT long.

Myth: 11:30 am would make the low of the day should there be a bounce.

Seems like today is going to be a day to chew off our fingernails. Look for some opportunities when the capitulation is confirmed and ride it for the bounce. I would however be very cautious over the weekend.

As for Forex:
I am going to short some USD/JPY, GBP/JPY and long EUR/USD.


Trade Small!


shorts:
longs:

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watch out below

When Dow ends so close to low of Nov 2007, Aug 2002 and March 2003, don't be a hero.

let it rebound a bit before going bearish again.

I am out of all currency trades for a tidy profit, and still long QLD, MOS and open TBT today.

Let's see what happen next.

shorts:
longs: TBT

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November support tested for DIA only.

DIA tested Nov '08 support today, and still testing, but QQQQ is still on a uptrend, so I took half of a position size on the QLD and open a long call position on QQQQ:
QLD stop at 24.68, 2% below the fib 161% extension, target: 30
QQQQ calls stop when it is below 28.48, target when QQQQ is at 31.50, it it does not reach the target, I will sell a upside call for some + theta



Also took a position on MOS, full position size, stop at $38.68


Here is my Trident worksheet.


Alas FOREX, in anticipation of a dead cat bounce the dollar should move down, I when long EUR/USD, AUD/USD, still long on GBP/JPY


Trade safe

shorts:
longs: MOS, QLD

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SPY broke support of 80'ish on a gapped down

Today was not pretty, because I was pretty bullish leaving the market on Friday.

As a result, RIMM, AAPL, SSO, POT all stopped out.
But my hedge DXD worked out and I cashed out too, because the Dow Jones is only 100 points away from the low it made in Nov 2008.

I still own FCX, TBT, not stopped out yet, if tomorrow provide a bounce, I will exit them too.

I am going to start putting my forex trades, you can see the standing stop and limit orders.
I am long USD/CAD, GBP/JPY and short AUD/USD.


Trade safe.

shorts:
longs:

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Take and run?

Watching the price actions today as the broader market struggle, I am very tempted to take profits and close all of my open trades now, on top of that Monday is a trading holiday. So it is very tempting.

I am happy that this round is profitable.

Looking at the sector summary now:


I am in the right sectors but don't know for how long. To hedge, I am going to long some DXD and on the option side, I will put on a short DIA FEB 84/MAR 86 Diagonal for a debit of $0.55 if the market turns, I will close the short side.

Also got long on CLF.



shorts: DIA diagonal
longs: CLF

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A well behaved SPY

I was so happy that SPY still in the channel, as my order of SSO at $21.21 was filled, I was afraid that it will get stopped out today. Alas the late rally made it up.




A few entries today:
APPL, a pretty good looking bull flag, stop at 95.35


POT another good looking bull flag, stop at 80.82


FCX, chart drawings no change, stop at 26.85

TBT, wonderful channel, stop at 44.45


And RIMM, looking for a quick dead cat bounce.


Good luck!
shorts:
longs:SSO, RIMM, AAPL, POT, FCX, TBT

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tomorrow is a new day

today, SPY touches the fib extension.



Support is not to the penny, also if any more news break out that is unexpected to the big money, big money sells, so goes the market. Let's see.

I have my long limit order to buy SSO $21.21, and stop at 20.65

BTW, it took 2 trading days but the resistance held and SPY bounced down, SDS trade on Feb 7 was a profitable trade.

shorts:
longs: getting ready for SSO

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Looks for a pullback on SPY

The week finished as the support holds for SPY and bounced, as I posted Monday.

Most stocks move with the broader market, because the index are made up of them. If one get the index right....aka the posture right, it is very easy to trade.

30 minutes before close Friday, I close all of my Bullish longs: RIO, PBR, PCR, CLF, FCX, ABX, APPL and XCO. pretty nice profit on this round.

As I see SPY hitting the 50 MA and also in the area of last high at 86/87'ish, voices told me that the market may need a break.


So I got long on SDS with half of the position size, stop at $71.89, I think at least 33% of this week's move is to be retraced. I am watching SPY at $85, it will translate to $77 at SDS, that will be my first target.
On the other hand if the market keeps moving up, I will get stopped out at 1/2 of the position size, no harm done. Because market shifted focus to fertilizers and rail, so as I exited my energy stocks, I also watched for the entries on those sectors.

As a result I added POT, MON, MOS and the rails: UNP, BNI and CSX to my watchlist. Last round was Energy and Basic Materials (gold).


One interesting note: APPL, hitting $100 and backed down, this is a legit W-1 move so far, we will see. of course RIMM, keep watching, it is climbing up the ladder.


Trade Safe

shorts: SPY
longs: SDS (same as short SPY)

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Channeling SPY

Looks to me SPY is channeling, so today I closed my SDS, ultra short on SPY, that I open on Friday, and open a new position on SSO, ultra Long, thinking to ride on this trade for a few days.



Havn't found a leading sector except for Techs.

shorts:
longs: SSO

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The tide is rising, long JOSB, ACI and TMO

Most stocks moves with the market, so an right analysis of the market already is 70% of a stock trade.

Looks like it is moving slowly each day up, albeit the utmost negative news.

JOSB: EMA counts, stop at 37.07, Target 1: 31.49, Target 2: 34.27


ACI, MA counts, W-3 trade, last time entered on Jan 21, but trade did not follow-through.


I also took half a position size on TMO, saw it moved last time, and entered on the bounce, but Acc/Dist is only 46.7 and the bounce is not confirmed by closing above 8MA ergo one half position.



shorts:
longs: JOSB, ACI, TMO

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Friday, trades

Friday, this is the forth day SPY on traded the same range, it gaped down and closed higher. I don't know what this formation called. But there is a three white methods candle formation, still not necessary the same.


Going through Google Finance, Energy sector again has the highest gain for the day.
There I found XCO in the highest Top Mover % Percentage. XCO closed above 8 MA and 50 MA, hence confirmed W-3 movement, icing on the cake: ACC/DIST 95.2


I also found PNRA, in my watchlist, after completing Head and Shoulder and bounced up closed above 8 MA and 50 MA, ACC/DIST 78.9


then it was SUN, one big candle confirmed W-3.


shorts:
longs: PNRA, XCO and SUN

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How did I found these trades?

Today was a pretty wild ride, if price action discount everything, it certainly did today.

SPY started out my 238% extension.

45 minutes before close. At Google Finance (http://finance.google.com) you can see the following:


Financial has the highest percentage move, but I already long UYG, so I passed
Energy is next then followed by Basic Materials

In Energy, I found PBR


which also moved above 8 MA and 50 MA, 30 minutes before close that confirmed a W-3 or W-5 move.
stop is placed 0.20 below the low of yesterday.

I also like ACI and RIO both making higher highs and higher lows and moved above 8 MA and 50 MA. All three stocks showed entry for long on my oscillator.

I looked at PCX, CNX, XOM, COP none of them made the confirmed Wave moved nor making higher highs and higher lows.

Next is Basic Material, looking over the "Most Active" section, I found FCX moved just above 50 MA but not yet 8 MA, however my own oscillator showed the entry for long. I already have a long position in GG. My stomach is not read for POT and MON again, so I will pass, since I have GG in gold there I won't want to hold ABX.




All my entries today have Accumulation/Distribution value > 60 and at least 1:1 reward to risk ratio to their previous high.

Trade Safe.

shorts:
longs: ACI, FCX, PBR, RIO and still long GMCR & GG

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Trading into the inauguration

going into inauguration,

GG: 32.5 Target, stop at 24.82
GMCR: pick in his pants by the 50 MA on Thursday, and follow through, my entry was Thursday, so it is too late now, but it worth to note that the importance of having many stocks in your watch list, because you don't know when the trade will come.


GVA: W-5 entry

RIO, double bottom, bounce trade


Best of success

shorts:
longs: GG, GMCR, GVA, RIO, ILMN and AZO

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Yesterday and Today

Yesterday, I closed all of my longs: DSX, EME, JOSB, FSTR, RS.... The rule to close them is a down day after a doji day.

Today I open: FCX, GNK, JEC, CMP, ACI.

GNK: stop at 15.68
still using the old analysis

CMP: stop at 59.78


ACI: stop at 17.28


FCX: stop at 26.29


JEC: stop at 48.57


shorts:
longs: FCX, GNK, JEC, CMP, ACI

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watch my watchlist

Trading requires attention to any stock movement. I have let money slipped my hands because I did not do my daily routine after a very fruitful week.





Today I opened a trade on JOSB.



RS still make 2-1 R/R, even I am a day late.


shorts:
longs: JOSB, RS

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Long VLO, ELS, EME, DSX, PNRA

very busy 2009 so far.

Market moves bullish so should I.

VLO: entered 1 day late as , so smaller position size.

By chinltong at 2009-01-02

ELS? confirmed W-3, skipping the chart, not too interesting

EME: trade between a long term fib of 50% and 61.8%, Target at $26.00

By chinltong at 2009-01-02

DSX: Chart

By chinltong at 2009-01-02

And R/R calculation:

By chinltong at 2009-01-02


shorts:
longs: DSX, ELS, EME, VLO, PNRA

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