Lone Investor

Time Horizons

noreply@blogger.com (Cameron) — Tue, 29 Sep 2009 01:42:00 +0000

Are you glued to CNBC constantly reading between every adviser's line for unintentional innuendo? Is your portfolio streaming all day? Do your doubt your methods with every twist and turn of the up current Dow Jones? Oil Futures? Iran's latest imbecilic leader's rant? Are you just miserable from your trading?

Lengthen your time horizon, allow for fluctuations, buy insurance at obvious times. And see the whole picture, the long picture, your life's picture. Let Rick Santelli's words drive someone else to drinking, drugs, and divorce. Use your time to look at more investment possibilities. Analyze the current situation without emotion. You can have unheard of gains with longer trading time lines, without the spasticity of a monkey with a cocaine lever.

Sigh

noreply@blogger.com (Cameron) — Wed, 23 Sep 2009 11:53:00 +0000

It is one thing to say the market will show you which way it is going. And it is another to trade solely by letting the market show you which way it is going. The last week, the market has said nothing but I am going higher. Yet as of Friday the portfolio had only a short in it.

Now five days later it has two shorts and four longs, the longs grabbed desperately under the threatening guise that one must get on board now.

As a result the portfolio is down over 5% for the month. a month in which no trading really needed to be done. Since this rally started in March more has been lost with contra etfs and shorting then is far necessary time to re-evaluate what you are doing.

Ho Hum

noreply@blogger.com (Cameron) — Sat, 19 Sep 2009 14:37:00 +0000

Even with loosening our stop criteria, we have been stopped out of all our long positions. Left with one short position going into Monday.

The market is still over bought, really. However it still is hugging that upper bollinger band and showing no signs of falling soon. However it does appear to be losing short term momentum and looks awfully familiar to the July rally that sort made a straight line from here, and then finally corrected a bit.

Although am not a huge fan of back testing and don't think history really repeats itself. Finding good short candidates is still easier then finding good long candidates. Probably neither will produce much in the way of short term wins.

The Audacity of Hope

noreply@blogger.com (Cameron) — Wed, 16 Sep 2009 15:45:00 +0000

To buy a stock that is going down and hoping that it will turn, is an expense in two ways. One the time it will take to turn costs, and the price falling below your purchase price is even costlier.

The positions you enter must be already moving in the direction of your trade. And there must be enough room to profit before they are likely to meet resistance.
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Sounds simple enough.

DLTR was just stopped out, and it wasn't moving up. It was just a cheap entry in a market that does not have many stocks with cheap entries.

Now granted it was defensive play, with an assumption that the market would observe that the economic rally doesn't have that much traction.

But it was placing an assumption that wasn't showing itself. So the trade was placed with the audacity of hope.

Market refuses to go down

noreply@blogger.com (Cameron) — Tue, 15 Sep 2009 17:54:00 +0000

Market rally is looking more and more like the July rally and not the August rally. Went long today in NGS and BCR. NGS is breaking out, and BCR is also both off smaller than optimum bases. NGS is going into all-time high territory short term and breaking a long trend trading range. BCR is breaking a long term down trend.

With the market positively in an uptrend it is time to trade longer term charts as there are no shorter term charts to trade.

Futures lower

noreply@blogger.com (Cameron) — Mon, 14 Sep 2009 01:24:00 +0000

Overnight futures are lower. On Friday we shorted TEL and purchased the inverse oil ETF, DTO. Oil is also lower overnight.

Shorting when the market is so strong is not advised. QQQQ is still riding the upper bollinger band, and we generally refrain from taking short positions when that is happening. However if tomorrow does indeed, close half a percent or more lower the shorting game will look stronger.

DTO on the other hand has much to like about its pattern. And the economy strenghtening enough going int fall to push up demand of oil is a rather flimsy premise.

Strenght returns

noreply@blogger.com (Cameron) — Thu, 10 Sep 2009 19:57:00 +0000

A strong day no matter how you slice it, the QQQQ pattern now looks to be heading higher. The long term down signal has also reversed. All patterns suggest over bought, but all patterns suggest an uptrend as well.

Took profits in both exposures to China because their nasty habit of opening at stops. Also went long DLTR which is not short term over bought but should out pace the market in the short term without much risk.

Stopped out again

noreply@blogger.com (Cameron) — Wed, 09 Sep 2009 18:14:00 +0000

Stopped out again on a long CREE at the open and the short WYNN. The WYNN trade was early again, several examples of that lately, as was profitable going early at the end of last month and am now paying for that continous behavior. CREE had a stop to protect 2% profit with a 1% stop. However the entire profit turned into a loss.

Notes from the last two months repeatedly say stops were too quick. Will now try not placing profit stop until 3% with a 1.5% stop. However since the market is now overbought will tighten stops at first sing of down turn.

On the bright side all stocks on short watch list have rallied sharply to make either better entries are begin new rallies, either way will keep from losing money.

Listening to your gut

noreply@blogger.com (Cameron) — Tue, 08 Sep 2009 18:04:00 +0000

Much money can be lost by only listening to your gut with no system of checks and balances in place. But when your gut hunches do not go away heed needs to be applied to them. Watching markets for twenty years and studying from others, your gut internalizes lessons.

Today the market still looks good long, but all those precautions listed in past posts, as well as mid term bearish, there is a clear cross current. With this morning nice open went long CHDX. But as the afternoon wore on, entered a short position on WYNN. Will let the market decide which is right. Tomorrow if opening lower will enter another short and then when the trigger comes from the system (Stochastic crossover) will enter a third.

Biy Signal

noreply@blogger.com (Cameron) — Fri, 04 Sep 2009 20:24:00 +0000

The action today was suprisingly positive especially after the eployment data, and a short term buy signal was triggred. We entered one long position CREE.

A buy signal right in front of a three day weekend and early in Spetember amid a mid-term correction signal is about the weakest buy signal one can get. We will load up short sale candidate Monday for Tuesday.

CRy

noreply@blogger.com (Cameron) — Thu, 03 Sep 2009 17:43:00 +0000

Bought and sold cry today for a quick 5% profit. Was stopped out exactly at an hourly low. Third time recently that the stop was exactly the short term low. Makes one suspicious of market makers.

Lists of Shorts

noreply@blogger.com (Cameron) — Wed, 02 Sep 2009 19:15:00 +0000

It is easier to get excited about shorts then longs at this point. Look at largest stocks in industries that have had the biggest run up in the last six months, and you see patterns ready to tip over. Will wait for the next rally to fizzle.

noreply@blogger.com (Cameron) — Mon, 31 Aug 2009 18:38:00 +0000

There can be such joy and excitement for trading correctly, it is easy to fall in love with yourself and the market. Thoughts that the market is in love with you and that it won't treat you wrong can enter your ego. Learning when the market is friendly for you, and when its not is a key to trading success. The market has no interest in you succeeding it is more like a river and you are on a kayak, the key is to read the river, not thinking the river is your friend. It just is.

Case and point BOM hit my stop today, and it was the low for the day and has since rallied.

The sell off today is too advanced to get in to feel comfortable with the position. Tried to short after the last rally but was stopped out with small profits. Will now wait and see a time to get in long.

Found BOM

noreply@blogger.com (Cameron) — Mon, 31 Aug 2009 17:47:00 +0000

Purchased BOM early this morning, however like most leveraged ETF's its open was strongest move of the day. BOM is inverse industrial metals.

With the market down today, am now waiting for a long opportunity. The market has fallen from its highs of the year, yet still remains in a strong uptrend, too strong to feel comfortable shorting at this point.

No toes in the water

noreply@blogger.com (Cameron) — Fri, 28 Aug 2009 16:16:00 +0000

Having made the monthly 4% early in the month the last small profit was gravy. Now just waiting for a profitable situation to come. Going short on the market here is dicey, yet the market is over bought and needs some time to digest.

There were some commodity plays like DBB, but now it is too late. Shame on you for missing it.

Breaking your own rules...again

noreply@blogger.com (Cameron) — Thu, 27 Aug 2009 16:09:00 +0000

A meager 1.5% profit was taken today on the FXP trade. A late morning semi-rally scared me into taking profits. The trade which was put on against the rules invented by yours truly, was also exited with nothing more than 'I'll take that.'

The overall stock market has now turned decisively short term negative, but with higher highs just made, the time to put on more shorts would be if the next short term high is lower.

Missing Moves

noreply@blogger.com (Cameron) — Wed, 26 Aug 2009 14:07:00 +0000

Purchasing ETF's DTO or SCO which are crude oil short, was an idea floating around, hadn't really set them up on a watchlist though. The move came yesterday a strong move, and continued so far this morning.

Pulling them both up on the charts, the move look to far advanced to enter. The short term stochastic was already at 50, and with the overall trend being down to flat, it just seemed the potential reward was not worth the potential risk.

Purchasing SMN, the Basic Materials stock short, did not as powerful as move. So entry was made. This leaves just two positions open a stake was purchased in FXP. The trade was commented in this space two days ago. Have not been stopped out of it yet, which is a positive sign. It actually now is a decent buy at a lower price then it was two days ago. Also looked at DUG the oil and gas equity short, but with it off fresh lows, did not go long.

The overall stock market looking a bit toppy here, but with it at new highs, don't see a huge sell off in the making.

The problem with winning streaks

noreply@blogger.com (Cameron) — Tue, 25 Aug 2009 18:14:00 +0000

Winning streaks are the nicest thing about trading. Trade after trade, day after day, balances increase, and the cloud you are on is none other then number nine. A couple of months of this and an insidousness starts to set in. A creeping vine of over confidence, that you can do no wrong. You are above the markets, and the very rules you have painstakingly created. So you take a short cut, and pull the trigger before the trade is set up. And see what happens, and you begin to hope you did not jump the gun.

A veteran trader can satisfy this insidousness with just one trade. One trade, tight stops, and the market will naturally bring you back to reality, that you are not greater than your rules, or the market. The result is a recalibration of your greatness, to that of a precise trader. And the cost is minimal.

Nipping your sabotage in the bud.

The feeling of trading success

noreply@blogger.com (Cameron) — Mon, 24 Aug 2009 18:39:00 +0000

Like other endeavors, competence in trading evokes a feeling of calm and serenity. One wonders how successful those commentators on CNBC that froth and the mouth and chortle like a rabid dog in a trap really are. What would be the point of screaming?

Vacation

noreply@blogger.com (Cameron) — Sun, 23 Aug 2009 21:03:00 +0000

Go on vacation and miss the rally it happens. Since one of the goals in trading is freedom, it has never made since to trade during vacations. Open positions are left with stops, and that is that. If staying where updates can be had, checking end of the day results is done. But sometimes rallies are just missed because, ready for this, there is more to life then money. There is enjoying the money. And that is what is done on vacation.

When you are right you are right

noreply@blogger.com (Cameron) — Mon, 17 Aug 2009 15:08:00 +0000

Then the question comes what to do. Contra ETF's with leverage have given enough profit in one day to get out and exceed the goals of the month. Stops have been tightened, but the probelm is these are reset in the morning so they could be well below the stops at the open thereby cutting into the profit.

The safe way to do this is to take a percentage of profits on all open positions near the close and let the rest ride the train of profit protective stops.

With a ten day hourly chart, the stops can be adjusted every hour as the rally in contra etf's mature you are naturally shortening up the room they have to fall. So any counter move in the last hour is likely to close out some of them any ways.

Toppings

noreply@blogger.com (Cameron) — Fri, 14 Aug 2009 15:58:00 +0000

The picture has cleared from Monday. Look at the chart QQQQ or DIA with favorite indicators, if you want to see a perfect top.

Ennui

noreply@blogger.com (Cameron) — Thu, 13 Aug 2009 14:57:00 +0000

Using trading as a source for excitement is lethal to your trading success. Conflicting signals from the markets you follow should lead to less trades being implemented. When the signals clear then your trades can be made. The only real work to be done during times of no signals should be updating stops and searching for future trades.

But if you rely on markets for a thrill ilke a casino you will lose your trading capital fast. Some other activity must be be used to fulfill this part of your personality. Or just be one with the ennui, it like all other things will too pass.

Let The Market Decide

noreply@blogger.com (Cameron) — Wed, 12 Aug 2009 15:08:00 +0000

When the market is pointing down, short term, yet trend is long term and you are in long positions the most prudent strategy is to find inverse ETF's that have tradeable patterns. Purchase roughly an equal dollar amount as your long positions. Place your stops on all positions and let the market decide.

If the market turns up will be stopped out of the inverse ETF. If the market continues down you will be stopped out of the long positions.

When the dust clears you should end marginally up or at worst break even.

What to do now

noreply@blogger.com (Cameron) — Tue, 11 Aug 2009 14:55:00 +0000

This is one of those time in the market when you have conflicting signals, the short term reading is over bought, the long term reading also over bought but the trend is higher. It is obviously best to wait for a pull back but your open positions have not hit their stops and you are watching capital declining.

The quick answer is to buy insurance, except the option puts are already selling for a premium, so you buy some leveraged bear etfs. Unfortuanately if the sell off does not continue you perhaps bought them at thier short term highs, and will lose money on this trade as well.

The othe roption is to simply do nothing if your trades stop out then you are done until the next buying opportunity, if they don't stop out you are in and the beginning of the next rally