Extended Vacation

After obsessing about trading for months, I got to a point where I was putting too much pressure on myself to trade non stop, expecting to be instantly just as good as some full timers. Needless to say this created mounts of stress and I decided to back off and stay away from trading until I cool off a bit. Timing of it was perfect as I managed to avoid the latest choppiness of the market and preserve all my winnings from earlier in the year. As some of the folks on twitter said - you only need to get rich once. 

So - Im on the sidelines and eyeing the next opportunity. 

To be continued... ;)

Casual Wisdom by Nate Michaud

"SPY SPY SPY... If SPY is in the gutter, don't buy the breakouts." 

Kinda "d'oh" when you think about it, but an advise of the century for me. 

Thank you Nate, you likely just saved me a ton of money. 

Not to mention nerves. 

Also, in retrospect, I was extremely lucky that I chose to move my $ now and was therefore forced to sit out and not participate in this market choppiness. Im afraid that have I staid in, I would have very likely given back a large % of my previous gains. 

You gotta love the big lessons you dont end up paying for.  

I understood this one. Now lets hope I remember it.

Red.

I was going to say that I played BEAV, MVIS and PEIX today but the more accurate assessment would be that they played me. And I could bet that it must have been bloody hilarious from their perspective. Still can't shake it off.

The lack of the proper tools got me again. 
Everything, and I mean EVERY-DAMN-THING on my watchlist was red. Stocks were falling out of formations,breaking weeks and month long trends, rendering my bullish oriented watchlist useless. 

Have I had an ability to short, this would have probably been one of the best days ever. Instead, I used a paddle to go against the Niagara falls... "Where's he goin'? - no where!" - pretty much. 

It is really interesting actually. In the grand scheme of things, and from numbers perspective alone - this wasn't even that bad of a day. I mean, it wasn't good, but it wasn't terrible. The red that I experienced was kept in check by predetermined evacuation targets, so the loss was really relatively minimal. What gets me is the fact that the market made me work for it, and work for it hard, lead me to believe that Im out of the dodge, only to suck me back in red when I expected to continue staying afloat and in green. In short, led me on, and on, and on and left me with blue balls. Nobody ever appreciates that.

I know, I should stop whining. I am fully aware that if this remains my worst day ever, I will likely be the luckiest trader that ever lived. And I know - its my own damn fault when it comes to brokers issue. Im just having a hard time accepting that Im going to have to sit out of the market for a few days while all the funds/account transfer/merging takes place...  

Tomorrow's a new day. 

Reset.

"It's a Bingo!"

Well, Friday was full of excitement in the market...

So much so that later that evening I took my wife out for a steak dinner at Smith & Wollensky's... some Dry-aged Porterhouse, half-a-cow-no-big-deal and a bottle of nice red kind of night. I have to say, after all the bs that 2013 has put us through... this felt good. Really damn good. 

The following morning, Saturday - I went about my business as usual - rowing practice, helped with spring setup of our rowing docks that got craned in... drove to Boston, ran some errands, then went and bought myself an ASUS ROG gaming laptop with some ungodly specs... 24mb RAM, gorgeous freakin thing - beauty and the beast. 

While I do still enjoy a good game of Civ here and there these days, (a game that clearly does not need anything near the capabilities of this monster) I went for this overkill with trading in mind. 

Over this past week I had a few instances where just as I was ready to click to submit a trade my old beloved laptop would casually freeze for some painfully long 20 seconds each time... Since my risk tolerance does not need another influencing factor, and since I was happy that I took... well, not only took profits Friday but NAILED, and I mean NAAAAILED an exit on PEIX, that brought me to a total of just shy of $7k for the week, I decided to retire my old desktop replacement friend and find a new one. And this thing is - perfect.

But don't let me get all Tim Sykes just yet. ;) I'm still just a noob and this is still barely even a beginning. Anyhow - PEIX - as I wrote before, I held overnight into Friday. And while playing with house money at that point due to my initially cursed but later celebrated entry point ($15.35), it still hurt seeing profit $$$ amount dramatically change. I got shaken out at $16.45, when the very bottom was $16.42. I was genuinely mad at myself for exiting, but without level 2 quotes the decision was on the charts alone and when they looked to be breaking down intraday imo - the feeling alone... 

I used to have, and apparently still do, a very special touch to find the bottom. And not just find, but sell there. There are multiple different levels of panic and psyche that I go through before I reach the one that screams to evacuate and on which I actually act. Usually, this is the point VERY shortly after which the price stops its descend and reverses back up, leaving me soiled and mad. 

lol.

Anyway, I got back in some 40 cents later, and rode it all the way up to a sell at $17.85. This exit point literally happened a split second before the stock reversed and tumbled down 30 cents within a minute, few min before the market close. Then continued going down. While I know that this stock has a lot more upside both short and long term, I was and still am so damn happy that I locked in profits and that Im sitting all cash on sidelines over the weekend. In fact, my wife and I both agreed that we should add that as one of the key commandments to our trading plans - close all positions, every Friday. I am sure that every so often there will be stock setups that will challenge that rule, but especially now, when we're both more often than not going all in every time - letting my money sit in a stock over the weekend is a whole lot more risk than I am ready to accept. 

Lets hope I continue to follow this rule. 

Is it Monday yet?? Can't wait.

The name of the game for me on Monday will be again PEIX and BEAV.

BEAV - my wife came across it - monster chart imo, multiple timeframes set up, I really think this will pop soon.

Again, these are NOT investment nor trade suggestions, just my thoughts that may or may not turn out to be true. 

Please use utmost caution. Cheers.

Red to Green, Mentally

Well... Seems that I used up my "One time!" prayer on this one... 

At market open PEIX moved up, and while still below my entry point, it made the pain considerably more tolerable. Then it plunged down, only to respect the trend line and bounce back up. 

In retrospect, my freaking out yesterday had more to do with me not being used to trading this size of an account rather than selecting a bad entry point. 

In fact, entry point value was actually ok, as the price just exceeded an earlier high. What I should have done better would've been to realize that the intraday run was overextended, and that while posting a new high, the stock was in need of planting another foot down before continuing the move up.

Ironically, I may have made a very similar mistake again today. But more about that later. 

Back to account size; even with my entry point, my downside risk was 3%. Could it have been under 1% if I thought more along the lines from the paragraph above? Sure, but we all know it now after the fact, don't we...

Anyways, as I said - my freakout had to do with $$$ value, as if I did not know better. Since Im building my account, I am greedy, I am agressive and I'm playing for all the chips, using all my chips. And when you see your hard earned money go red in $$$ rather than % its easy to get your head foggy. 

This is the one thing I used to like about Forex trading - that you won and lost PIPS rather than $$$, even though its ultimately all the same, it's mentally less taxing (I did 2 months of Forex trading training with Maverick FX prop firm but realized that hectic and random schedule of events influencing it were just too hectic for me. For once in my life I actually got to appreciate the structure forced upon me (regular market hours)). 

Luckily my yesterday's freaking out was channeled through my loud panic aka writing, instead of panic selling this morning. As you learn in sports for example - there are different levels of believing in something... An outer level of "loud" thoughts saying "I can do this", as if you are convincing someone else but you dont necessarilly trully believe it. Then there's a little more quiet thought of "I got this", while leaving room that you may not be able to accomplish it afterall. And then there is the rock bottom conviction of "Done motherfucker" that needs no explanation. The best part is that all these are just levels of inner monologue/conviction. 

When it comes to trading and risk/panic management, I find myself to have very similar levels of risk/panic tolerance. Yesterday's blog bitching was one level above all those, as it was out loud in a way.

Anyhow - I held PEIX throughout the day today. I noticed it coiling up, as the "feet planting" became more frequent. It finally bounced just before 2pm and ran up into the close. It went as high as $16.10, then sold off in last 5 minutes and closed at $15.87. The resistance that it needs to break to confirm the breakout is >$16.30.

As mentioned above, I may have made the same mistake I made yesterday, only today it wasn't entirely my fault. Simply, I held it overnight without taking profit since I had to leave for rowing practice that I coach, which this week starts at 4:00pm. It was only after I left my PC that the it went significantly more vertical, and there was no way that I would be making a call on something like this from my phone in a car. While moving. lol

The reason I say its the same mistake is because the chart now looks overextended intraday and could easily pull back down all the way to $15.20 without hurting the trend. However, that would wipe out my today's gains. On the other hand, I was thinking that it may gap up tomorrow, and that if it doesn't - Im still playing with house money. 

How ever it comes out, this is yet another lesson. 

Hopefully learned. 
This week as a whole screams: TAKE PROFITS!
Simple. 

But not really. 
It's a tough balance to learn, when to lock in profits vs. letting your winners run.

We'll see. Cheers.

Expensive Lessons and Insights

Yeah... confidence. It can be a bitch. 

I held MCIG overnight expecting a gap and run play this morning. 

By the time it became clear that a little gap that MCIG did open with will not produce a run up, it was already impossible to get an order to fill and sell, and within minutes MCIG took a dive, erasing yesterday's gains (12%), putting me in red on the trade, at that moment. 

Since I did believe in my reasons for which I entered the trade in the first place - I held and saw it recover some 7%, then go down, up, down, up... a rollercoaster. 

Finally it coiled itself in a flag, and since it could have, in my view, broke out on either side, plus given the fact that when its falling it becomes impossible to sell - I decided to cash out for a gain of close to 4%. 

Did it hurt settling for this, knowing I left 12% gain on the table yesterday - it sure did. However - green is green. 

Here comes the really painful part. Sitting on the sidelines and pissed I was looking for a trade, even though it would have been best to just chill. I knew this, I dealt with overtrading before and thought I got it under control.

Yeah.

I dug into my watchlist, full of stocks with great setups which were simply just not ready yet, but I decided to force enter one of them - PEIX. I broke every rule that I had. If I entered it with the quick scalp mindset that would be one thing, but I entered a breakout stock setup in the making, at a random high point while climbing the side of a triangle. It was just breaking above a previous high, but not the one that would indicate the breakout. I combined two good strategies into one smelly turd. 

The thing about being mostly a breakout trader is that you exchange the 5-10-20 or whatever percent of potential gain for the security of knowing with certainty which way the stock will go next. When disciplined and well executed, this strategy is extremely high probability and depending on a number of factors - it can land you from, say - 5% to an absurd percentage of profit. 

But as said before - the problem with over confidence is that after you see these setups over and over, and they turn out exactly the way you expect them to - you start getting cocky and thinking that you can nail even those extra how-ever-many-percent that you would normally give up during the setup of the breakout. And that is exactly what I ended up doing today. While high probability when ripe, breakout setups are not breakout until they clearly break out. Well - duh.

To make matters worse, damn PEIX ended up closing in a doji following an uptrend, luckily just a hair above yesterday's close; A.K.A. needs confirmation either way, so tomorrow will be crucial.   

Platforms.
This is perhaps the most perplexing of all of my questionable decisions...
I am attempting to swing/day trade out of two margin, investing accounts, not day trading accounts. Which while still better than non-margin, are just about as inapropriate as they get for what I need them for. Its like attempting to build a 2014 Aston Martin while only using hammer and anvil. Ridiculous. While I know about Suretrader and others, I wanted to wait until over $25k so I can open a decent day trading account. Which really means about $30k to be safe not to end up with a margin call if in red. I am really close to my goal and instead of preserving the base, I gave into the temptation of getting there NOW. And because of that, now - I am pulling the signiture poker prayer: "C'mon, one time..." - definitely not something that any trader should ever do. 

Embaressing lesson learned. Lets just hope its not ridiculously expensive.

My watchlist for tomorrow, and in NO way a reccomendation for investing:

CTIC > 4.25

WWE > 4.10

TRTC > 1.45 - 1.50

MCIG > 0.93

Also on the watchlist:

GTAT, RDNT, ROSG, MEET, MRNA, INO, ERBB, GLCO, AGIO, TGTX, TITXF, MOBI, FFFC, OCLS, ISR

    

Confidence Boost

Wow what a week this has been, since my last post... 

Following Fannie Mae trade, I took a few days off to settle down, as that FNMA development (doubling up and getting out before it dropped) got my blood boiling with excitement 24/7 and I did not think that that was a productive mindset to go into a next trade with. 

As very proud as I was of that realization, I was even more proud of the way I spent those following few days before my next trade. As mentioned earlier, I was very intrigued by Nate Michaud's InvestorsLive DVD, as well as some other trading gurus' services and instructions. After bothering some nice folks on twitter (@VeritasGreen - thank you for your time man!) in search of answers regarding Nate Michaud (@InvestorsLive), TimSykes, Superman etc., I finally gathered a critical mass of information and decided to go with Nate's - InvestorsLive DVD. As said earlier - it was pricey ($1k) but I have to say very much worth it. Within almost literally hours, I made that $1k back... almost 4 times over. Now to be clear - I am not a pumper for his service, I do not and have never worked for the guy, but I do give credit where its due. And his DVD does deserve it, no second thoughts about it. You should know that before I submitted myself to his DVD class, I did have just about one year's worth of experience with the market, investing some, trading some, but primarily learning bits and pieces about technical analysis from many random sources. 

What that $1k bought me in that DVD was a horse dose of confidence. It defined very clearly high probability setups, and gave me a comprehensive overview of everything a trader should know, and more importantly should and shouldn't do. For someone like me who was self taught - the presentation of an organized system made all the difference in the world. 

So then, last Friday (03/14), with a cool head and backed up by the lack of a feeling that I am winging it, I screened the charts and decided that GrowLife, Inc. (PHOT), even though coming off of a move up - still had more to go and was consolidating before the next leg up. Afterall, this is the time of weed stocks and they are practically flying from pennies to dollars overnight. I bought PHOT on Friday, held through the weekend. Got a nice little gap and run action out of it on Monday, before I sold it for about 20% gain, some ten percent short of its total day range - but hey - I was happy with that and I locked in profits before the ride got too turbulent. I was even more inclined to do so when I tried to exit my positions at the top of the first high of the day (HOD), and could not get it to fill my order. It was an OTC penny stock afterall and apparently these types of things happen more often than not in OTC stocks. The following day (Tuesday 03/18), PHOT gapped down at open, went down almost 20%, and closed 11% down. To say that I was really happy with my timing would be a gross understatement.

Finally - sitting all cash on the sidelines today and browsing my watchlist at market open, I noticed mCig, Inc. (MCIG), another weed stock, inch its way towards the critical area of resistance. As it was moving with some momentum, I anticipated its move, set my order just to where the breakout was confirmed and watched it as it took me on one helluva rollercoaster all day, which ended in almost 12% gain for the day, on more than double 50 day average volume. I am holding it overnight expecting gap and go play in the morning. 

One of the biggest things that finally clicked in my head recently is the importance of finding tickers whose charts look similar on multiple time frames i.e. weekly as well as daily. The best way I can describe it is that having the weekly chart line up with the daily is like having your big brother watch your back in a fight. It takes the level of uncertainty out of the equation, therefore justifiably increasing your risk tolerance.

Some of the other stocks I am looking at the moment:

CTIC, AEGY, PEIX, AGIO, DANG, GLCO, Z, WWE, BIG, INO, TRTC, PHOT, FROZ, MJNA, SKTO.

Please be advised that I am NOT a professional trader, nor the financial advisor of any kind. Expressed opinions about stocks are my own interpretations and not trade reccomendations in any way.

FNMA Fannie Mae Bloodbath, 03/11/2014

WOW. What.a.day. Jesus.

Fannie Mae and Freddie Mac ended their bullish, almost month long run today, with a nearly 50% drop from today's highs, which were also their new 52 week highs. 

I got in at the bottom of the move, almost a month ago, with an entry price of $3.07 and $3.20 in my two accounts, deciding that I will hold until the chart or government news tell me that its the time to cash out. 

When FNMA gapped up this morning to $6.02 and continued to climb, I was up 94% in one and over 101% in the other account. By 9:45am it started to get tired and reversed, now pulling slowly but steadilly lower. As I will later realize, this is where watching the price action of the stock for months actually paid off. FNMA liked to close gaps. It has done so enough times that I learned not to panic and adjust my (mental) stops accordingly. So when it started going down this morning, it was business as usual. I assumed that it was heading for the gap, considering that yesterday it closed at $5.83 I think, and opened above $6 today. But then a strange thing happened. It somehow found support and bounced of off $6.00 and went up again. There was absolutely nothing on this level except for the end of the fake spike a few days back and todays open, which certainly should not have acted as the support. Whether this makes sense or not, but this move got me suspisious. Since it was moving on high volume (and considerable hype due to blue sky breakout teritory - new 52 wk high), it quickly climbed pass $6.10 - $6.15 - $6.20 levels. Based on its previous move and Fibonacci levels, $6.20 should have been the next resistance. It didnt take long to pass it and just as it was above it, at 10am, I saw somebody share a new news article on $FNMA twitter feed that talked about bi-partisan wind down efforts getting some more traction in Washington. Alarm bells went off in my head. Surprisingly, the stock was still raging, posting new 52 week high with every passing minute. My wife was at work; I had to reach her to make sure she knew of these developments (we both trade/invest separately but this time found ourselves both heavily invested in the same stock - FNMA). 

At 10:21am she sold her entire position at $6.28. Moments after, even though the news was already out for almost half an hour, the stock went up further, setting a fresh 52 week high of $6.34. Sitting just of off 5 year high, with unfilled gap under, odd price action and history of ultra violent crashes - I reached my peak of risk tolerance and put in a stop loss at $6.20 which got filled moments later. I was out and quite genuinely sad. I did not like giving up my low entry point as I believed that this stock will continue higher in upcoming days. Minutes later, it was 5% below the high of the day (HOD) and again, inexplicably (for me), stopped itself and bounced from just under $6 ($5.95 or so). This really got me bummed because now I thought - I was just paranoid and got shaken out like so many people before me. Because this is what FNMA would normally do on the days like today - gap up, run a bit higher, sell off quite dramatically until she closed the gap, then continue on a slow and steady grind and by the end of the day and - close GREEN! 

She back tracked up to $6.21 or so, spent the next 3 hours there, slowly making lower highs, while bouncing of a very optimistic support line created by yesterday's end of the day (eod) highs and today's lows. Until the right side of the equasion got to heavy for the support line and sent it all down into the abyss. And boy does this girl take a dive. 

At 1:06pm FNMA price was $6.06. 
By 2:06pm it was $4.54 
By 2:39pm - $3.26

Bloodbath. 

I hope that all my buddy FNMA longs are alive and well tonight - you're all FNMA veterans and I know you have the stomacks to handle this. Rough non-the less. 

Now on my end - good news is - wife is extatic about securing an over 50% gain on a very heavy position. While exhausted from excitement, I am on the doorstep of finalizing my financial goal of setting up a daytrading account (25k minimum) + paying off some cc's and such. 

I've been thinking about this for weeks now but I may finally, actually act on it - I want to go ahead and invest in Nathan Michaud's DVD trading lessons. Its pricey (just shy of $1k), but I have a feeling that it will pay itself off in no time. I crossed paths with him on twitter, and he seems to know what he is doing, on top of which he seems like a normal guy. So many of these other guys, while might be brilliant, give me the feeling like they are trying to sell me Mighty Putty or some similar infomercial product. Im not a fuck yeah guy and I dont care for a fuck yeah coach trying to teach me something intelectual. Sports are a different story. 

Alright, gotta run. Peace.

Wonderful Journey

Discovered stock market at age of 33. Continued to wonder in the dark for a few months, investing a very modest sum in random stocks. Survived 6 months without blowing up my account until I discovered Technical Analysis, and got hooked. Read everything I could find. Found out that swing and day trading fit my persona considerably better than investing.

Grew my account ten fold over the following 8 months...

I have never been more excited about Mondays, and more sad on Fridays, in my life.

This is where the story starts;
I don't know where it's going, and I'm loving every second of it.

Buckle up.