8 lessons learned from my first 2 months back to live trading!

I re-funded my Sure Trader account on the 6th of December with $2,500 and promptly resumed day trading the next day, Friday, 7th of December, 2018.

From that date till the present day, I have made a total of 122 day trades with 45 of those in December and the remaining 77 in January. During this time my average winner has been around $75 while my average loser has been around $45. I spent $230 in commissions in December or $5.11 avg./trade and $417 or $5.42 avg./trade in commissions in January. 

For the entire period, my win rate was 39%. However, my win rate in December was just 29.55% but I improved it to 44.16% in January.

While my expectancy over the entire 2 month period was +$2.97/trade; in December it was -$4.71/trade but then I improved it to +7.46/trade in January.

The improvements from December to January were no fluke but instead a product of daily journalling and reflecting on my trades, mistakes and improvements I needed to try to make daily. 

That being said, my goal for February is to continue making improvements, reduce the average number of trades I take daily and reduce the number of mistakes I make with a view to making
around 50 trades at a 60% win rate and around +$27 expectancy (($75 x 0.6) -  ($45 x 0.4)) or to gross around $1,350 before commissions and fees which I would like to get back to around the December avg. or $5.10ish/trade.

I think this is very doable if I can master these lessons that I've learned from my last 2 months of trading:

1. MARKET BREADTH/OVERALL MARKET ENVIRONMENT

In December, which was pretty much the last leg of the market correction that begun in October, market plays and shorting (or longing inverse ETF's) worked extremely well while "in-play stocks" did not really get the kind of follow through you'd usually expect from them! For example, in December, I had a 46.15% win rate on market plays although my overall accuracy was a very poor 29.55% as stated above. In addition, my win rate on shorts was 33.33% while my win rate on longs was only 26.09% which is truly even lower as this figure includes longs I took in inverse ETF's which are technically short plays.

January, on the other hand, has been the complete opposite. Shorts have generally had poor follow through, market plays have been less successful and "in-play stocks" have worked very well especially to the long side. My win rate on longs in January was 51.16% but only 35.29% for shorts. While I did not take too many market plays; I was only right on 1 out of the 3 I took while I was right 45.45% of the time on in-play stocks!

LESSON: Try to only take trades that align with the overall market breadth as the probability of success will be higher. Continue to focus on in-play stocks and ignore market plays as long as the markets remain in a healthy uptrend. 

2. MARKET INTRA-DAY TREND & RELATIVE STRENGTH

My win rate on trades that did not align with the market's intra-day trend was only 28.57% versus 50% for those that aligned with the intra day trend of the markets. Interestingly though, for trades that did not align with the overall markets trend but were showing extreme relative strength/weakness, my win rate was an impressive 80%! 

LESSON: Try to ensure that all trades are aligned with the intra-day trend of the overall markets especially for trend continuation set-ups. Pay extra special attention to stocks that are clearly resisting the intra-day trend of the overall markets and are forming tight flags or wedges! 

3. STICKING TO "IN-PLAY" STOCKS

I define a stock as "in-play" if it is on course to end the day with volume traded that will be two or more times it's average daily volume over the past 50 trading sessions. For stocks with a relative volume less than 2, my win rate is 21.88% and stock less than 1 even lower at 14.29%. Where as my win rate rises dramatically to 45.98% on stocks with relative volume of 2 or greater!

LESSON: Avoid stocks with relative volume below 2 like the plague! Trade only stocks with RVol of 2+ and obviously the higher the better!

4. SPREADS, MARKET DEPTH, ORDER FLOW & RISK MANAGEMENT

I'm way too experienced now to still be placing trades in stocks that have wide and erratic spreads, constantly changing market depth and crappy order flow. It's extremely hard to manage risk in these types of situations and I know don't need to trade them to make money. My risk management demands that I enter a hard stop into the system after entering a trade and the above make it extremely difficult to manage risk and it's very likely will not be filled within a few cents of my stop loss if it gets triggered. Most if not all of my losers that exceed 1R were from situations like this!

LESSON: Do not trade when you cannot enter a market stop in the system aka no trading in pre-market or after hours. Do not trade if you can enter a market stop but are not absolutely certain that you will get filled within a few cents of your planned stop out point.

5. FLOATS 

Stocks with float under 25 mil, I have a 50% win rate but -$26.25 expectancy on the ORB set-up but 100% win rate on trend continuation set-ups like pullbacks, flags, wedges, etc. Clearly due these types of stocks being very spread and erratic at the open!

With mid float stocks (between 25 mil and 500 mil) my win rate on trend continuation set-ups is 43.48% with +$15.74 expectancy and 35.71% win rate with +$2.60 expectancy for ORB set-ups. 

With high float stocks, float > 500mil, my win rate on ORB set-ups is 50% with +$24.21 expectancy but -27.27% with -$12.64 expectancy on trend continuation set-ups. 

LESSON: Avoid trading micro float stocks at the open. Focus on higher float stocks for the ORB play. For trend continuation plays on the other hand, avoid trading stocks with float above 500mil and favour the lower float stocks! 

6. THE 5-MINUTE CHART IS MY BEST FRIEND!

Any time I deviate from the 5-minute chart and step down to the 1-minute chart I almost always end up taking a poor entry, setting too tight of a stop loss (and consequently over sizing), not giving solid trade ideas even time to work or getting out of moving in my favour way earlier than I should. 

LESSON: Stick to the 5-minute chart at all times: for low risk/high reward entries + setting proper stop losses + giving trades room to work initially + locking initial profit and then letting the 2nd half of trades mature into big winners!

7. TRADE MANAGEMENT/COMMISSIONS

Stop getting carried away with 3,4 or even 5 partial exits. My trading size is not big enough for that! This is only carrying up my commissions and fees without a dis-proportionally larger increase in profits as well as stifling the gains from my partial position.

LESSON: Exit winners in 2 pieces and no more than 2! 

8. MONEY MANAGEMENT

Too often I've been guilty of giving back more than half of my profits on the day and sometimes even going from a significant green position into the red. Furthermore, on my biggest green days, I rarely if ever suffer two consecutive losses out of the gate. 

LESSON: Reduce my maximum daily stop to $100 or 2R from $150 or 3R until the first month I'm able to pay myself. Do not give back more than half of profits on  the day. Do not go from green to red on the day! 

Plans and adjustments for my 4th attempt at becoming a consistently profitable day trader!

Sad to say but my third attempt at growing a small day trading account in September/October ended once again in failure despite a quite promising start. Unlike my first 2 tries, I went with TradeNet which honestly was not a bad experience. It may very well turn out that TradeNet is a scam but when you take into consideration the fact that I only had $399 (the price I paid for their Intro package) at risk it was not a bad option for any one trying to make a start in their day trading career. So with the $14,000 in buying power I started with in September; I'd manage to take it up as high a $14,700ish by my 2nd week of trading. However, After then it was all down hill. In the next three weeks; I managed to erase the $700 in gains and lose a further $700 thereby triggering the max loss on the Intro account and being shut down. Since this; I've been day trading with ThinkorSwim paper and going through the same daily routine I'd be going through if I were trading live money. Although I haven't been keeping strict track of my paper trades; I've been able to uncover and work on some of the "demons" that have been holding me back from consistency which I'll mention later as well as how I plan on countering them.

That being said, this week, I will be re-funding my SureTrader account and making a forth attempt at finding consistency in my day trading. 

My Plan:

1. I will start with $2,500 which will give me $15,000 in buying power this time around. Last time I started with $1,500 ($9,000) in buying power and gave myself a max daily loss limit of $100 or 2 stop outs as my max risk was $50/trade. This time I will give myself a max daily loss limit of $150 or 3 stop outs instead. I've come to realize that I usually need around 3 "bullets" before I should call it a day. Many times I might make an early dumb trade; followed by a good entry in a good idea but get shaken before getting back in and making a nice trade for solid profit. So before I was sort of choking myself up. I was forcing myself to be perfect; not giving my self room for error or room for being too early in entering good ideas.

2. As before; my focus will be on the daily chart (for idea generation) plus the 30-minute and 5-minute charts (for timing entries; placing stops and managing trades). However, I will banish the 1-minute chart completely from my platform as this has been causing me to over trade at the open and make several poor trades for every one decent trade I would make from the 1-minute set-ups. 

3. Keep 5-minute charts of the market indexes up at all time and try to take most trades in alignment with the 5-minute trend of the market indexes

4. I will take absolutely no trades in the first 15 minutes after the open and even try to avoid taking any trades up to 25 minutes after then open. I will let the market indexes and individual stocks form clear trends then look for low risk entries near the 9-ema on the 5-minute chart.

5. I'm also going to invest in a proper laptop (my current Lenovo with i3 processor definitely not going to cut it any more...can't even run ThinkorSwim without freezing every minute) and a third monitor to increase my screen real estate.

6. Finally I will also join a group of traders. Bearbulltraders are at the top of my list.

I should be re-funding my account some time this week and will give an update on my first week's performance next weekend! 

Quitting Day Trading...What's next???

This Friday marked the end of 7 weeks since I started back trading. I started with $1,000 on May 10th, 2017 and then added another $500 at the start of June. So in total, I've contributed a net of $1,500 to my SureTrader account in this period.

 

At the moment, I am down to $700ish in equity or basically making a net loss of $800 over the 7 week period.

 

Of the $800 I've lost, about $100 was for platform and level II fees (plus a further $100 will be deducted from my account at the end of this month) and all of the remaining $700 was for commissions since I've actually managed a positive gross return over the period albeit a small one..$33.50.

 

With the economics of this business clearly being tough for small accounts mainly due to the high relative commission fees and platform costs; my trading statistics over the period have actually been quite poor.

 

My accuracy is about 40% and my win:loss ratio is around 1.5:1. Which is about breakeven before commissions and platform fees etc are factored in.

 

My honest conclusion after 7 weeks at this (with a day trading style) is that out right day trading is not the right style/strategy for me at this point given my skill level or lack thereof, account size and cost structure.

I need to get back to what has worked for me in the past and what will be more conducive for success for me given my proven skills (track record), current account size and cost structure.

 

My plan is to switch back to multi-day holds (swing trading style) like I had originally planned to do. I never stuck to my initial plan of hybrid day/swing trading and I've now paid an $800 price for this...lol.

 

Essentially I need to take less trades per week, use wider stops and smaller position size and go into positions with the intention of at least holding over night or even up to as many as 3-5 days once the trades are working.

 

These changes should cut my commission expenses down; increase my win:loss ratio and get my accuracy back up as I am much better at picking winning swing trades off the daily chart versus picking winning day trades off the intra-day (5-minute & 1-minute) charts.

 

I will stick with this new plan until at least the end of July and then assess my statistics at that point. I believe I will see much better success with this style/strategy but we will see.

 

 

Largest losing day and my plan going forward...

So today was almost an absolute nightmare. 

After spending the weekend in deep thought and deciding that I'll just wait for the stocks on my watch list to set-up and trade them...I threw that plan completely out of the window!

Although I told my self I'll not try to trade any gap-and-go's and wait for setups after the markets have already opened...I attempted a gap-an-go play in $BIOC which invariably turned out to be a loser...$75 after commission.

I actually shut my laptop down and decided that I'd call it quits for the day as I went against my plan that I made over the weekend and lost more than my planned daily max of $50. For some reason or the other, I ended up logging back in!

No sooner than I'd logged in....I saw $SORL down ticking after its massive morning run and decided to randomly short it...within minutes I was stopped out for a $45 lose after commissions. 

Then the stubborn part of me decided I had to short this stock again although the stock was clearly in a firm uptrend and there was absolutely no reason to short!! 

Nevertheless, I started... 100 @ $8.75 ish....then another 100 @ $9.00ish....then another 100 @ $9.25 ish...determined that I'm not going to let this stock kick my ass...lol. With just 1/4 of my intra-day buying power remaining; I decided that I would wait for the stock to actually break its uptrend before adding any more shares. Then as soon as it did...I added a last batch of 100 @ $9.00 and then was ready for the stock to tank. 

It started dropping and so I put a bid in for my position @ $8.75 which did not get filled. Then the bastard started bouncing. No sooner than the stock started bouncing I was required to leave my desk for work related reasons...so I decided to put in hard stop in case this stock decided it wanted to rip higher.

Now the proper stop loss placement was above high of day @ $9.50...but because I was sized in so big; a stop there with my average entry of $9.00 would have meant risk $150 which  I was not prepared to accept even though at one point I was down by that much...lol. Silly me right. 

Never the less, I proceeded to place my stop at the random price of $9.15 and of course I was nicked out before the stock turned lower. 

I also made one other trade in $IMMU for the $7.50 break attempt but after it started stalling I decided to take a $5 loss ($15 after commissions) and call it quits for the day. 

At this point I'm honestly not sure how to proceed. I know I'm definitely not going to quit trading but I'm undecided between 2 paths. Both involve putting a halt to my trading for a while. However, I am trying to decide between paper trading for a while then re-funding my account and starting again on my own or using part of the funds I have availabe to join a group (Investor's Underground is top of my list) before refunding with a slightly smaller amount and trading again with the support of a group. 

I'm strongly considering going with the later option. Will ponder some more about this and give an update in the near future!

How I made 18% gain on my $1,000 account in 1st week back to trading!!!

So as promised, here is the analysis of the trades I made in my first week back in the game!

Here's a screenshot of my trading journal in TraderVue:

As you can see from the screenshot, I grossed $254 or 25.4% gain on my $1,000 account from just 5 trades in my first week. After commissions and other fees (not shown); I netted a decent $180 in profits or about 18% growth in my first week.

My accuracy for the week, 80% (although based on a small sample size) was better than I anticipate it will be long term. My long term goal is 60 - 75% accuracy. 

My win:loss ratio was 2.20:1 ($71.62/$32.50). Although I would like to see this higher; I am very happy with this and I will be elated if I can maintain a 2:1 win loss ratio long term!!

Based on the statistics above; I can expect to gross around $50 profits per trade. Further I know that I will make between 1-2 trades per day or 5-10 trades per week next week. So my goal for next week will be to gross $250 - $500. So basically if at the end of next week I can at least match my performance from this week I will be satisfied. 

Bear in mind; my goal is a 50% growth on my account by the end of my first month. So if I can maintain my performance this week through the end of this month; I will easily eclipse my 50% goal. None the less; I will not allowed my self to get carried away with the "projection" game. My focus will continue to be making solid trades, base hits one at a time and if I'm performing and feeling well push for that home run trade near the end of the week like I attempted with $AUPH on Friday although it did not quite pan out. 

Looking forward to another solid week of trading. Always remember; defense first!!! Winning trades will take of them selves as long you're patient and let them play out. It's the big losing trades and consecutive losing trades you have to guard against! 

Best of luck next week...CHEERS!!!

Back trading again but with a whole new mind set!!!

So after spending what felt like an eternity away from trading (2013 was the last time I placed a trade I believe); I am finally back in the game! 

Ironically this time, I will be starting with the smallest account I've ever traded with, a tiny $1,000 account. My broker of choice this time around is Sure Trader. 

Although my style of choice will be swing trading; my main reason for choosing SureTrader was avoiding the PDT rule. As I know from experience that I am capable of making consistent positive monthly returns swing trading but the PDT rule has always halted my progress. 

In addition, SureTrader will allow me 2:1 overnight margin although my starting balance will be sub-$2,000. Their commissions are also quite good for persons (like myself) trading generally smaller positions sizes (1,000 shares or less will cost me a maximum of $6.50 per buy or sell). 

As far as post-market scans for swing set-ups are concerned; I've opted to pay $29.99/month for TC 2000 gold. I've already spent the last month or so getting familiar with and it allows me to do my market, sector, breakouts/breakdowns, set-up scans every day in less 30 minutes. Although I can accomplish the same thing with FINVIZ for free; the process is usually for too time consuming and tedious.

For order entries, charting and alerts during the trading session; I will use SureTrader Pro for the rest of May at a cost of $50. 

From June however, I plan to use ThinkorSwim by TD Ameritrade for charting and alerts at no cost . I've sent off an application for an account with them so that I can use ThinkorSwim with real time data for free. I will then switch to the SureTrader Web platform which is free of cost for order entries/management. 

So my total expenses for my first month will be $80 but only about $30 per month there after. 

I plan to use TraderVue for journaling and analyzing my trades. I will journal my trades at the end of each trading day but analyze them monthly. If I am not meeting or exceeding my goals; this will show me why and also show me any adjustments I need to make.  

During my time away from trading; I'v done a lot of reflecting and studying. As a consequence my attitude and mind set have shifted. I no longer see the markets and trading as an avenue to "get-rich quick" but as haven where one can grind out wealth in the long term (years) given a solid trading plan, consistency and discipline are maintained day-in, day-out. 

As such my goals which are multi-tiered now reflect my new line of thinking. My long term goal is to grow this account to around $30,000 by the end of 2019 (as opposed to a million! :p ) so that I can then fund an account with ThinkorSwim with no PDT restrictions. 

I have however, broken this longer term goal into shorter term goals:

1) Grow my account from $1,000 to $5,000 by the end of August 2017 or achieve roughly 50% compounded monthly returns. During this period, I will size aggressively; risking 5% of my equity per trade with a maximum of 1-2 positions at a time. I will be at or near fully margined on most days.

2) Grow my account from $5,000 to $10,000 by the end of December 2017 or achieve roughly 20% compounded monthly returns. I will size more moderately; risking only 2% of my equity per trade with a maximum of 4-5 positions at a time. Although I will likely still be at or near fully margined fairly frequently during this period; my portfolio heat will be more spread out as my risk will be spread across more positions.

3) Grow my account from $10,000 to $30,000 by the end of December 2018 or achieve roughly 10% compounded monthly returns. I will risk only 1% of my equity per trade with a maximum of 8-10 positions at a time. This way my account will only get fully margined more sporadically and likely only when the markets or certain sectors/industries are trending strongly one way or other and lots of set-ups are emerging daily. 

As far as blog updates: 

1) I will post my focus list aka the stocks I will be looking to take positions in the next day every night as well as my market bias and any other thoughts on the markets;

2) I will at minimum, weekly post reviews of select trades that I'd taken during the past week: 

3) Finally, I will do at least one update at the end of each month looking at my progress versus my goals; my trade metrics; incites and adjustments I will make for the upcoming month. 

Monday should be my first official day live. I will post my Monday watches tomorrow night. So excited to get started...lets get this!!!

Update...

It's been a while since I've blogged so I thought I'd give an explanation as to why as well as the latest update with my trading.

After violating the PDT rule at my previous broker (SpeedTrader); I retarded-ly did the same again at my current broker (MBTrading) Friday before last. So as of the last Friday in June, I haven't been able to initiate new trades.

I've held onto my long position in $REGI ($13.98 avg.) and don't plan on selling it anytime soon. This is the only position I'm holding.

My plan is to switch to a prop firm sometime next month to avoid this cursed PDT rule. However, my plan will be to draw off my profits (if any) at the end of each month and save my way to the $25,000 minimum hopefully by sometime next year.

Not going to force any unrealistic goal on my self thereby making a way for poor trading. Just going to focus on trading to the best of my ability and it is my belief that I will get there soon enough!

Current positions and some ideas for next week!

OPEN TRADES: $REGI ($13.98) $NXST ($34.40) $IRBT ($37.85) $SPWR ($20.98...added today)

Here are a few ideas I have on my radar:

Update and watches for tomorrow...

Today was not a particularly good day for my trading account as I was forced to take sizable losses on the open in $ACAD, $FXI and $IYR. As I had lamented in my previous blog post, I thought I might have gotten a bit too aggressive with my long exposure on Friday and the market proved me correct this morning.

So after today's close I'm down around 7% off my account high but still up around 5.5% since my account's inception this year. A 7% draw-down is way too steep and unacceptable on my part. I hate taking more than 3% draw-downs as in the past it has affected my psychology and caused me to revenge trade. However, I more aware of this weakness now and will attempt to slowly claw my way back. After all, I'm not running a race!

After the markets bounce attempt late in today's session, I got back into $ACAD for a swing and so this is the only position I'm holding at the moment. Although I was wrong about getting the bounce today, it is now even more likely that we bounce tomorrow and even higher that we at least get a violent 1 - 2 day bounce this week. So this is what I am positioning myself for. If it starts unfolding tomorrow; I will be looking to add longs from the list below along with my $ACAD position.

WATCH LIST: $PRLB, $AMRI, $RH, $XONE, $SCSS, $YELP, $NXST, $FNGN, $DDD, $INFI

Trading update and watches for tomorrow

Although the markets are in still in a correction in my view, I turned short term bullish on Friday and positioned accordingly. I bought shares in $ACAD as I really like the set up and think that it can push to $20.00 next week if the markets bounce. I also added long positions in $FXI and $IYR via call options looking for mean reversion plays.

I might have gone a bit too heavily long on Friday especially since the close on Friday was not as strong as I was expecting. Plus the after hours price action in futures is also not very encouraging at the moment although there is lots of time for this to turn around before tomorrow's open. I still firmly believe that we will get a bounce, even if not a powerful one, based on the following evidence:

While the Russell has made 3 successive lower lows with a bullish doji on Friday, the McClellan Oscillator has made 3 higher lows! I think this will likely result in a 1 - 2 day bounce:





So despite being in a correction; I do not want to initiate short positions here. Further although I will be looking to make long plays; I have shortened my time frame and consequently my profit expectations. Instead of looking for 3 to 5 day plus swings and trading off the daily chart; I will now be looking to make over night plays to 2 day swings at most off the 15 minute chart while also using tighter stops.

Here are my top watchers for tomorrow: $XONE, $PRLB (3-D Printing), $TVL, $NXST (TV-Broadcasting), $INFI, $ACAD, $AMRI (Bio-techs), and $STAA

Sorry I couldn't post charts tonight but I'm really pressed for time.

All the best with your trading next week!

Trading update...

Coming into the day, my account was 100% cash.

The huge gap down on the open had me hesitant to add short exposure as the uptrend in 2013 has conditioned one to expect a bounce after such huge gaps down.

Not getting short turned out to be a mistake as the bounce never came and the selling in the markets was unrelenting.

So on the weight of this evidence, I took a sizable short position in $GILD at $49.62 about 1 hr before the close. I have almost 100% of my account short $GILD. So if it follows through I'll bank some nice coin. But if it doesn't; I take a quick loss as I'm using a tight stop.

**At some point, I believe the markets will bounce but I believe any bounce is likely to be tepid. It's going to take some time before the damage in the markets is repaired. So for the foreseeable future, I'm short biased and will be staying away from longs like the plague!

***If you're a swing trader, my advice is to please stay away from taking new long positions until we start a confirmed uptrend!!!

Hope this post helps!

Trading update and my best swing ideas for 6/20/2013

I sold my two overnight positions early in the session and went to 100% cash. $VSAT I took a flat on after being up nicely at Tuesday's close and $TSRX I took a loss on. I decided to stay in cash until after the FOMC minutes were released and ended up touching nothing for the entire session.

After today's session, I definitely can't see myself going long stocks. I can't say that I'm an outright bear at this moment either but I think the risk/reward at the moment favors shorts especially after the market's reaction to continued fiscal expansion by the FED today.

Tomorrow, I'll be looking to add the following shorts to my portfolio:

Trading update 6/18/2013

It was a good but not great day for me today. As although I locked in some decent gains; it wasn't anywhere close to what I had expected. But at the end of the day a profit is still better than a loss. Here are the trades I closed today:

Stock

# of shares

Entry

Date

Exit

Date

PnL

QIHU	50	$44.00000	6/14/2013	$47.00000	6/18/2013	$150.000
XRM	250	$9.87760	6/11/2013	$11.01000	6/18/2013	$283.100
XRM	250	$9.87760	6/12/2013	$10.85000	6/18/2013	$243.100
QIHU	50	$44.00000	6/14/2013	$46.75000	6/18/2013	$137.500
SOHU	60	65.420000	6/14/2013	$66.54000	6/18/2013	$67.200
ANGI	100	26.510000	6/17/2013	$26.60000	6/18/2013	$9.000

So basically I sold all the swing positions I came into the day with and booked closed to $900 in gains. 

Near the end of the day, I added a couple swings I'd been eyeing for a few days now:

STOCK	# OF SHARES	AVG. ENTRY PRICE	% OF PORT.	CURRENT STOP	TARGET
VSAT	100	71.998000	79.42%	$71.00	$75.00
TSRX	500	8.650000	47.71%	$8.50	$9.25

If these swings work out I'll be very close to achieving my target of growing my account to $10,000 this month. My account at the start of the month was around $7,230 and it currently stands at $9,150. In other words, I'm up about 26.6% for the month and 14.4% since the inception of my account in late April! 

Not bragging but how many traders do know of that are achieving this kind of returns in the current market with a clear strategy and trading plan spelled out nightly?

Trading update and thoughts on the market!

With the continued constructive price action in the indexes and some leading stocks breaking out and acting well on Friday; it is my firm belief that the markets will see higher prices next week:



With my confidence that we get a new uptrend even stronger on the weight of clear evidence; I decided to increase my long exposure to around 140%. So I'm now on margin. First I added to my existing position in $XRM which closed very well. About 60% of my account is invested in $XRM. I missed out on $RVLT; didn't want to buy the $4.00 break out like I had planned to as it occurred in the first 15 mins of the session. Breakouts this early are very risky and highly prone to failure. So I passed on it and the rest is history with the stock closing up 11%+!

In place of $RVLT, I decided to initiate positions in $SOHU and $QIHU. A little over 50% of my account is invested in $QIHU and about 25% invested in $SOHU. I will be looking to add to $SOHU if it gives me the chance to do so. Both of these stocks have brimming fundamentals and have managed to move sideways during the market's current correction. If the markets can break out next week; I believe these stocks will be the first to touch new highs. In fact, $QIHU will be hitting new all-time highs out of a high tight flag! (Check my previous blog post here if you want to see my thoughts on $SOHU)



In addition to the above mentioned stocks I also really like $ANGI. This stock has all the characteristics of a stock that can make an explosive move like $TSLA if we a get leg higher in the markets over the next few weeks. Firstly it's growing its sales quickly although it has not yet turned profitable. It has a low float and is highly shorted. There are some very strong skeptics betting heavily against the stock yet its consolidating just off all time highs. If this stock can hit profitability in its next quarter; we might very well see a parabolic ramp up!





Those are my thoughts and ideas. Hope they help!

Update and my best ideas for 6/14/2013

I made a couple bone-headed moves in Thursday's session. Firstly, I initiated a short position in $SSYS although 1) it had not broken through its trigger ($81.00) and 2) the overall markets were bouncing like I had been anticipating the night before. Every now and again, I make some really bone-headed trades when I start getting over confident and this was one of them. I took a quick and some what painful loss as the stock spiked up to the low $82.00's in minutes which was the level I had set as my stop out point and that's where I got out.

After this trade, I was somewhat frustrated and when I saw a sharp sell off in $CSII, I sold it although it was no where close to my stop loss and the over all market was trending higher intra-day. I took a small loss on this trade as my planned risk was very small from the outset. I should have never sold out of this stock. It ended up closing well and still looks poised for higher prices; I was tempted to get back in but I didn't want to risk burning up a day trade on a stock which was not even one of my top 3 ideas.

Although the markets were very bullish for the entire session and I was seeing some nice set ups worthy of buying; I decided not to touch anything and that's exactly what I did. The only smart thing I did was to not sell $XRM which is my only position now:



Although I'm seeing many decent set ups; the stocks below are the ones I like the most and really want to add to my portfolio tomorrow if they can break out:

Trading update...

I did not expect it but we had a very ugly sell off in the markets today. I thought it was a certainty that I would get stopped out of $XRM but it held like a champ and only closed in the red by 2 pennies! Just goes to show why it pays to stick to your trading plan. I will continue to hold onto it even in the face of continued selling in the overall markets as long as it does not hit my stop. I really like the set up and story of the company. If the markets bounce...I believe it will break out and rip to new 52-week highs!

Although I didn't get a chance to post my watches last night, I had my eyes on some really sweet set ups this morning. Namely: $CSII, $REGI and $TA. While the selling crept into $REGI and $TA forcing me to discard any thoughts I had of adding them to my portfolio; $CSII held up like a real champ. So I took a position in it right before the close at $21.60 and watched it closed right at the HOD of $21.65. The set up looks really good ahead of data the company will present next week Thursday on one of the devices its developing. Here's the chart:

Update and watches for 6/11/2013

I came into today holding long positions in $YY and $LEDS both of which performed admirably although $YY did close off its highs a bit. I think both of them will see higher prices tomorrow and so I'm still holding both positions. If $LEDS can spike up into the $2.20 - $2.40ish zone tomorrow...I will book at least partial profits but most likely I will be out of my entire position by the end of the day unless I get another really strong close. I have no plans of selling $YY tomorrow unless it goes parabolic and hits my target ($35.00) or breaks down which seems unlikely. In any event, my stop on both positions is now above break even!

$RBCN and $RVLT were two decent performers today off my watches from last night but I couldn't touch either of them on account of some issues with my broker. However, hopefully these will be sorted out by tomorrow and I should be able to trade without restrictions again (except for PDT...lol)!

After Wednesday's close I was a bit hesitant about the market's bounce. After getting follow through on Friday; I became a bit more confident and added the two long positions I alluded to above. Although today was not a particularly spectacular day from the perspective of the markets performance...the constructive price action I'm seeing in momentum stocks including the two that I am currently holding is telling me that being a bear is wrong at the moment! Accordingly I will be looking to add more long exposure tomorrow. At today's close, I was about 50% long but I will be looking to bump that up to around 150% with the ideas below!









**I still like $IMOS and $EVC from last night's watch list as they haven't taken off yet.

Trading update...

Came into the day 100% cash.

I added to 2 long swings.

First I bought $LEDS which was on my nightly watch list at $1.671 average in the morning.

Then in the afternoon I session I added $YY at $28.30 which was not on my nightly list but I tweeted about it.

$LEDS closed ok so my expectations are not too high for it.

However, $YY has just about all the ingredients for an explosive move next week and it closed right at the HOD. I think we'll see $30.00+ in $YY on Monday!

Enjoy the weekend!

Trading update and watches for 6/7/2013

My morning started out horribly with $ANGI spiking on literally no volume. When I first tried to exit the position; I inadvertently doubled my short position at $23.60. Had I held onto this position, ironically I would have ended up with a decent profit. However, I just covered everything at $23.60 as that was my pre-planned stop loss only to see it reverse lower to below my initial entry price ($23.15) within a few minutes. In hindsight I could have given it a bit more time to see what happens as the move was pretty much vertical and happened on a few thousand shares with no news. But none the less I stuck to my plan for the trade, took the loss and moved along.

Of the 2 long ideas I had on watch: $CLSN and $VECO...I touched none. $CLSN broke down so I lost interest. Although I still liked $VECO I wanted more confirmation plus clear signs of a reversal in the overall markets first. The close today was certainly a good start. So I will be looking to add long exposure tomorrow via $VECO and a few others tomorrow (if I get the confirmation I want).

**I want to highlight that I still believe that we are in a corrective phase and I am merely looking to play a snap back bounce within a down trend. I'm looking for 1 - 2 day moves at best and if I don't get my profit targets in that time frame...I'll be taking what ever I get and not sticking around! 

Here's what I'll be looking at for tomorrow's session:

Update and watches for 6/6/2013

I came into Wednesday's session with my account in 100% cash and no intention of adding any positions for reasons I pointed out in my previous post. However, when I saw the markets taking out their morning lows after weak bounces; I thought that the odds of another red day was very high. So I took a short position in $ANGI which was the only short set up on my watch list at $23.15. Although the markets did follow through and ended up having a trend down day...$ANGI did not follow suit. This stock is very thin and heavily shorted with solid earnings reports in recent quarters. So I'll be keeping a tight leash on it in Thursday's session.

As I highlighted in my previous post, the McClellan oscillator was already at levels indicating that the odds of some sort of bounce even if only a weak one is very high. Well as you can imagine; after today's ugly sell off the oscillator is now into even deeper territory. So shorting down here is definitely risky but the markets could still have more downside! Therefore I'm not sure if getting heavily long stocks is really a solid play here as the markets can easily work off this over sold condition with a day or two of sideways action and then head lower! So even if we do get signs of a reversal and you decide to add longs; I do not recommend looking for more than a 1 - 2 day bounce. At least that's how I plan to approach things.

My watches: