Johnson's Trading Blog

BIDU Trade Walk Through

noreply@blogger.com (Johnson's Trading Blog) — Wed, 28 Jan 2009 19:24:00 +0000

Frustrating trading today - FAZ and MON

noreply@blogger.com (Johnson's Trading Blog) — Fri, 23 Jan 2009 22:51:00 +0000

Today was very frustrating. I finished in the black but I was close to having a remarkable day if I'd just made the most of FAZ and MON. I had great timing on my trades but was too careful to book profits instead of hold for real money. Examples are below.

Trades not taken: MON long - likely $2-3 gain with about .10-.20 cents risk. Should take that trade every time.

Trades taken that I didn't make real money on: FAZ short. The financials have gotten clobbered and were due for a bounce after gap downs. I shorted FAZ at the perfect moment about 6 minutes into the trading day. Covered for a nice little gain. But... I settled. I should have covered half, and let the rest run. I thought the stock would fill the gap and it eventually did that and much more. No reason for me to not ride that trade and make 10 points or so. Later in the day I initiated another FAZ short, once again with perfect timing. I closed it too for a quick little gain but if I'd held through the end of the day I'd have made 6 points and the stock never went any higher than where I covered. Frustrating to have the right ideas but for some reason lack the conviction to stay with them.

FAZ:

MON:

FAS

noreply@blogger.com (Johnson's Trading Blog) — Wed, 21 Jan 2009 20:30:00 +0000

The FAS rallied today after yesterdays brutal sell off. You can see below on the 60 minute chart that the time to buy was on a move upwards through the 8.47 level.

DXO out of the declining tops

noreply@blogger.com (Johnson's Trading Blog) — Thu, 11 Dec 2008 18:03:00 +0000

I was a chicken these last couple of days and never established a position. Now that DXO has broken out of the declining tops I'll wait for some semblance of a pullback to jump in.

Linda Raschke's Market Thoughts

noreply@blogger.com (Johnson's Trading Blog) — Fri, 08 Aug 2008 15:22:00 +0000

The Dow, SP, Russell have had well defined downtrends on both the daily and the weekly time frames. Currently, the weekly charts are correcting an oversold condition which should lead to further upside. However, it would take an incredible amount of work to turn the daily time frames, as well as the weekly time frames from downtrends to uptrends. That is unlikely to happen in the next few months, so on these indexes at least, you are still looking at a corrective rally in terms of structure.

Watch to see what type of volume comes in over the next week. Naz has already had a clean upside breakout. So - that is my two cents worth - the market can still have upside potential from here, but much of it is coming from rotation, which never supports a sustainable long term rally.

Click here for the full article

SKF intraday setup

noreply@blogger.com (Johnson's Trading Blog) — Fri, 01 Aug 2008 16:36:00 +0000

Watchlist for 7/31/08

noreply@blogger.com (Johnson's Trading Blog) — Thu, 31 Jul 2008 05:55:00 +0000

Sad Day

noreply@blogger.com (Johnson's Trading Blog) — Thu, 03 Jul 2008 03:21:00 +0000

The Seattle Sonics are no more. The gutless City of Seattle reached a a settlement this afternoon with the thieves that bought this team from our gutless former owner, Howard Schultz. Ugh.... All we have left now is YouTube highlights of the Reign Man and the Glove.

Paul Desmond (Lowry's): "Quite a ways from a bottom"

noreply@blogger.com (Johnson's Trading Blog) — Tue, 01 Jul 2008 15:42:00 +0000

"We think we're still quite a ways from a bottom," Desmond warns. Over the next year, he expects the Dow to fall 30% to 50% from its October '07 top. The market could enjoy a few short-lived rallies during that span, like the one we experienced from March through May. But each rally is apt to result in a lower high and a lower low in the market.

- Barron's 6/30/08

Desmond is the author of the esteemed Lowry's Report and is someone I go out of my way to listen to.

Below I've attached a chart showing the 30% and 50% retracement levels off of that Oct '07 top.

T2108 Update

noreply@blogger.com (Johnson's Trading Blog) — Thu, 26 Jun 2008 21:03:00 +0000

Thankfully, it appears my status as a "Spam Blog" has been removed and I'm free to post to Blogger once again. Though, some of you may think this blog is just as spammy as ever. Ha. Spurred on by Stewie's exuberance here is an update on the Worden TeleChart T2108 indicator.

T2108 is an indicator which tracks the % of stocks that are above their 40 day moving averages. It's worked very well in the past as an indicator that gets you long when everyone else is experiencing maximum amounts of pain. I first picked up on this indicator a few years back when Gary B Smith, formerly of TheStreet.com, would reference it constantly.

We're at 15.00 as of the close today. This is below the levels we hit in Jan and Mar of this year and just above the Nov 07 lows (hit about 13). The Aug 07 lows hit 7.7.

T2108 - Oversold Indicator

noreply@blogger.com (Johnson's Trading Blog) — Fri, 20 Jun 2008 17:33:00 +0000

The vaunted Worden TeleChart T2108 indicator is beginning to approach levels that are more associated with bottoms than tops. I'd be careful with shorts here and start making your long watch lists. We may not bounce today, tomorrow or even next week but it is important to be ready for when we do.

GOOG

noreply@blogger.com (Johnson's Trading Blog) — Thu, 19 Jun 2008 22:50:00 +0000

I went long a pretty good sized position in GOOG today on the chart pattern below. My entry was at 553 and I'm holding overnight for now. Got out of the MON today as well as ferts don't look safe for now.

Interesting Note from Hamzei Analytics

noreply@blogger.com (Johnson's Trading Blog) — Wed, 18 Jun 2008 23:28:00 +0000

"Our Market Pulse Indicator (MPI) is getting ready to setup for a [ROYAL] FLUSH of the weak longs. Once we are thru that painful process, we should be ready for a blast off. The window is 2 to 5 days. Brace Yourself."

This and more at their site: Hamzei Analytics

Watchlist for 6/18/08

noreply@blogger.com (Johnson's Trading Blog) — Wed, 18 Jun 2008 05:34:00 +0000

Here is a picture of my watchlist for tomorrow. The flagged stocks are particularly interesting to me.

Solid Day

noreply@blogger.com (Johnson's Trading Blog) — Tue, 17 Jun 2008 18:27:00 +0000

I've had a pretty good day so I don't have room to complain but it's hard not to wonder what could have been. Check out the list of stocks I had identified for potential buys today and their performance on the day (listed in the sort value column)

I'm currently in some MON, NE and NBL as they are breaking out or looking like they will soon. Oil and Ferts - stick with what is working.

FLR Looks Ready for New Highs

noreply@blogger.com (Johnson's Trading Blog) — Tue, 17 Jun 2008 13:59:00 +0000

FLR is looking great on the daily. Poised for new highs soon.

Setups I'm Watching

noreply@blogger.com (Johnson's Trading Blog) — Tue, 17 Jun 2008 03:56:00 +0000

Took it pretty easy today. Caught about half a point or so on MOS and POT and then picked up some APWR at 25.80 and decided to keep it overnight as it closed at the highs.

Bo Yoder Update

noreply@blogger.com (Johnson's Trading Blog) — Thu, 12 Jun 2008 22:41:00 +0000

An update from Bo Yoder today:

This market desperately needs to form a higher low, as any retest of the "peek" double bottom we formed in would be an extraordinarily bearish event.

Normally, when a breakdown occurs after a "peek" double bottom, prices will fall about as far as they did prior to the bottom's formation. If this projection is made, it would put us at the 1,000 point level for the S&P 500. We have plenty of room for reversal before any breakdown can occur, and I hope that the bulls are interested in defending the bottom in the months to come.

This and more at his very helpful website: The Five Minute Investor with Bo Yoder

Bounce Near?

noreply@blogger.com (Johnson's Trading Blog) — Thu, 12 Jun 2008 13:30:00 +0000

Rob Hanna is out with another great post - this time referencing the McClellan Oscillator and what that it is saying about the long side in the comings days / weeks. Well worth your time:

Link: What The McClellan Oscillator Is Suggesting

That Kind of Day - FSLR

noreply@blogger.com (Johnson's Trading Blog) — Wed, 11 Jun 2008 19:48:00 +0000

I violated my own rules and gave FSLR a shot on the short side. Top ticked the sucker - wonderful. Lost 1.26 / share instead of being up well over 5.00 / share

Linda Raschke Interview Notes

noreply@blogger.com (Johnson's Trading Blog) — Wed, 11 Jun 2008 16:20:00 +0000

On June 5 I participated in an interview / conference call with Linda Raschke. Raschke is likely most known for her excellent track record as a short term S&P 500 futures trader. I took some notes during the call and have done my best to make sense of my scribbles below

Two additional sources of great information on Linda can be found here:
1) “Linda Bradford-Raschke’s 5 trading patterns” (PDF document)

2) The New Market Wizards: Conversations with America’s Top Traders by Jack D. Schwager (Amazon Link)

Below are my notes on her thoughts:

WHERE SHE TRADES:

95% of profitability is on futures
Have a game plan before the market opens
ABC setups
120 Minute flags

HOW TO BECOME A PROFESSIONAL TRADER:

1) Practice - similar to golfer or musician
2) Do it, model, after 2-3 years hope to see some improvement and proficiency and find a niche that works for you
3) Make trades. 1 trade, 100 trades, 1000 trades, 5000 trades. After 5000 you should hopefully have a level of proficiency.

FAVORITE BOOKS:

Favorite money management book:

Kenneth Grant - Trading Risk: Enhanced Profitability through Risk Control. (Amazon Link)
Book addresses the importance of maintaining an active trading rhythm - feel it when the door opens and more volume comes in

Favorite other book:
Roy Longstreet - Viewpoints of a Commodity Trader - 2 pages in there are particularly helpful.
90% of the time most professional traders trade with 50% of their line or less.

PSYCHOLOGY:

A) Look into sports psychology books - $20 bucks buys you a great book

B) Emotions - less emotional the better - even temperament - get more even tempered with more experience

The best traders don't beat themselves up and don't let it go to their head if / when they are making big money

THINGS A BEGINNER NEEDS TO DO:

A) Get experience executing - 3 months of practice just getting out in 1 tick. Execution becomes automatic.

B) Newer you are to trading the shorter your holding period should be. The less time you are in the market the less risk you have. Longer you are in a trade the more objectivity you will lose

Could she recommend one strategy for a beginner to start with?

Take 2 time frames - 5 min and 15 minute use the two together and look for a pullback on the 15 min time frame in the direction of the trend but wait for the divergence on the 5 minute to trigger your entry.

Divergence - can give you a level of an absolute stop - shouldn't take out the last high or low. Don't want to fade the trend. Don't short a sell divergence when there are new highs being made daily.

WHAT IS SHE DOING NOW?

1 trick pony - does the same thing over and over but with bigger size. That's really the big secret. Find a niche. Find what you are good at and just learn to do it bigger size.

BOOKS MENTIONED:

Time To Buy the Financials

noreply@blogger.com (Johnson's Trading Blog) — Tue, 10 Jun 2008 16:03:00 +0000

Maybe. Maybe not. Would certainly be a gutsy trade here.

I have an excellent indicator that is telling me its time to buy them for a trade though. I've been testing a new system that looks to buy and sell Ultra ETF's (2x) based on RSI signals. The basics are that it goes long when RSI(2) hits 10 and sells when RSI(2) hits 80. I've tested the system as a whole with around 50 ETF's that have enough volume and the win rate is incredible.

The UYG (Ultra Financials Proshares) signalled a buy on 6/3/08 at 27.76 and are currently trading at 26.00 even, offering an even greater opportunity to profit than usual. Note below the historical success of trading the UYG based on the system's criteria. Tests were run purchasing an even 10,000 of UYG on every signal. You can see that the system is up around 100% since the first trade was executed in May 07. Pretty impressive considering the system is buying UYG while its fallen from 70+ to 26 today.

GOOG - Taking what the market is giving me

noreply@blogger.com (Johnson's Trading Blog) — Mon, 09 Jun 2008 17:31:00 +0000

Nice quick trade for some fast money. Another one of my favorites - very little risk as it was breaking the lows of the day. Cover when you feel the downside slowing. If it were to have turned around just after my short I'd have considered going long as if taking out the lows can't push GOOG down it is likely to head up.

Sea of Red

noreply@blogger.com (Johnson's Trading Blog) — Fri, 06 Jun 2008 18:40:00 +0000

POT and MDR still holding pretty well. A lot can change in an hour though.

FSLR - Great Setup

noreply@blogger.com (Johnson's Trading Blog) — Fri, 06 Jun 2008 13:52:00 +0000

FSLR looks ready to rumble.