Friday, November 21, 2008

Trading Journal +1R

Today was a mixed day, I've been following some stocks in the morning, but most of them changed direction on me so I kinda lost interest, but after a while I found a few trades, but still managed to only do +1R, nothing more..

I'll only show one graph today:

OMRI gapped up this morning, and therefore went into my watchlist, I almost deleted it from my watchlist when it went down at 10:30, but I stayed put, and waited for the 11:40am base to break, so I decided to buy it afterwards.
Thats it for today.

Tuesday, November 18, 2008

Money Management

Today I'll be talking about money management, which is the most important aspect of trading as far as I see it.

The most simple act in the world of money management is simply to put a stop loss command, which means you will sell the financial instrument you are holding (for instance A stock) if it will fall 4% for example. Explanation - That if bought a stock for 100$, and decided that you are not willing to lose more than 4%, you should either wait for the stock to fall to 96$ and then sell it, or put a command into your broker’s account telling him you want to have a stop loss 4% below purchase price.

I usually don’t risk more than 2% of my money on any single position I take, and even that figure is too big and should be minimized, that is used to protect me from having spikes in my equity curve, thus using money management system that limit your account from market crashes like 2008 one. Could very much save your entire account instead of just let it free fall. Image having 100,000$ under management, the stock you picked it priced 50$, and your target price is 58, you want to protect it with a stop loss at 48$ (4% below), how do you choose how much quantity of the stock to buy? Should you use your entire buying power and put 100,000$ at risk? That would be much of a mistake, looking at it in a money management perspective, since 2% of 100,000$ is 2000$, and by putting your entire account exposed to 4% downfall of the stock from 50$ to 48$ you could lose 4000$ on that deal alone if it would go wrong, which means double the amount you wanted, so good money management system protects you from doing such a mistakes, telling you that the maximum amount of money you could allow that position is 50,000$.

Another important money management rule is to cut losing eras short, we as traders tend to be a bit of gamblers in a losing streaks, thus if we start losing, we keep trying to put another trade, get that position that our system is telling them that will not likely to be a profitable one, in order to get out of the losing streak, but as the old saying say, “when you find yourself in a hole, stop digging”. My advice is to stop trading by the end of the month if you see that you have lost 8% of you capital in that month alone, it’s obvious that either the environment that you are trading have changed, your trades are going wrong, or maybe you start buying the no-good positions that normally you’d never take.

Please tell me if you like it, and which other subjects do you want me to cover.

Tuesday, November 4, 2008

Trading Journal +2.5R

Today I've had a decent day, I caught the change in trend at 10:00am, and thus was able to make some bucks out of it.

PETM is a stock that have been on my radar lately, and I saw that it reacts almost the same as the NQ, so I decided to buy it long after I saw accending triangle, and it worked nicely, not so much profit on the R side, only 1.5R, but then again that is nice as well.

Here is the chart of today's best trade:
Sorry for posting so little, I'll get back to fully posting soon, it helps me with the proccess of learning the stock market.

Thursday, October 30, 2008

Blogging and more..

Who said working nine to five is hard? I think that blogging is hard as well, committing to a blog is a difficult thing to do, and while trading wasn't so bad lately, I've decided to get back to blogging and posting my results, as a continuation of my trading journal.

So what have I been up to lately? I've been trading mostly gaps as always, and was doing pretty nice job in that, I've finally became profitable, and had a profits of 482$ net in October, I know it's not much, and it's not something one could live of, but it is nice to start being profitable, and I'm glad it finally happened, that's it for now, that was my short update, I will be updating more often from now on.

Thursday, September 25, 2008

Daily Journal Break even..

Today was nice, it felt in control, I've risked only 20$ per R, which means that I was gross positive, and NET break even(tiny on the positive side).

I've made my research before entering the markets, finally things slow down at work, so I had some time to do my research, then I had my entry triggers, and I took them as planned, it's difficult making any money with this 20$ = R, but I'm sure it will allow me being more relaxed in my trading.

I might higher my R, but only in a little bit, I don't want to get crazy with highering R too much, since I don't want it to be a psychological stress for me to trade, I want to make trading fun again, like it did before I went trading with no plan and no rules.

One of my trades which I didn't like so much today was SQNM, I took it on a mini downtrend, which made me loss after a short while, I shouldn't have taken that trade.

Anyways, nice day, no money made, but I'm getting my confidence back, today was pretty much in control, and very patient, waiting for signals and executing the plan just in time. I just really god my mood down after SQNM, so I stopped trading, right on time, I'm learning lately that there are times on which you shouldn't trade, like if I'd keep trading after SQNM, I would take non-setup trades just to "make up for the loss", and that's the recipe for a blow up day :)
Blow up skipped, ThX for my studies on the market.

Have a nice day.

Thursday, September 18, 2008

Sec Isn't shortable..

Is me or every stock that I'm watching isn't shortable? today I've found many nice short opportunities and they all just weren't shortable, when in the world AMZN isn't shortable? we always have stocks of AMZN for short, but not today!

I've given up for today, I don't want to wait for the reversal, if it will happen anyways, I came too late for some long opportunities that came around 9:45 today, so I'll just call it a day, PNL = 0 on 0 shares traded in case anyone wondered :)

I'm actually glad that this week is about to be over, it's one of the wieredest weeks lately, my boss was out of country, and I just did w/e I wanted, came in hours that are convinience to me and left whenever, that didn't help me from getting stuck until 20:30pm yesterday, I just have tons of work, which saddly enough I'll have to carry for the weekend (yes, they give you laptop in this job so you could work from home :( )

Anyways I'm going to enjoy this weekend, and hopefully do more of this:

One more trading day to go for this week!

Wednesday, September 17, 2008

Update of the 17 Sept..

I'm actually not as bad as I thought! After I've talked with a friend of mine (Eitan from the links menu on the right), I've decided to put the charts of today's losers (3 of them), and found out that I'm actually closer to "The holy grail" than I thought, I was really about to "Stop digging" and give up pretty soon, since there is no one really that encourage me to stay in the game, and I keep losing money, even if it's small money (only 65$ today), it's frustrating to lose day after day.

I've written everything about each trade in the graph himself, notice to my readers, please let me know:
1. If the way I put on charts is convenience.
2. What do you think about my losers of today.