The Links

Buisness week article learning and profiting from online friends.

Google squares an interesting new offering from Google.

Yaro from Entrepreneurs Journey looks at what motivates a purchase.

Life hacker comments on The BRW Rich 200 On How Not To Lose Your Money.

Problogger gives us 13 Tips for Marketing Your Business With Your Blog.

The EMH a dead parrot?

Monty Python’s Dead Parrot Sketch

Why Motivation doesn’t matter.

Confessions of a recovering spendaholic.

Your credit score V the United States.

Would you work without pay?

No wonder California is broke.

1984 need I say more?

World resources map.

IRS Taxing your work mobile.

The 50 best C64 Games.

Your dad does what?

Not Cute.

Enjoy your weekend.

Internet Tools

• Firefox (Free) – Open source web browser. Download Firefox.
• FlashGet (Free) – Free Download accelerator. Download FlashGet.
• COMODO Firewall (Free) – Simple easy to use free firewall. Download COMODO Firewall.
• Windows Live Writer (Free) – A excellent free tool to compose blog posts. Download Live Writer.

Trading Tools

• Rapid Miner (Free) – Free data mining toolkit. Download Rapid Miner.
• QuantLib (Free) – A free finance programming library. Download QuantLib.
• Octave (Free) – A free MATLAB implementation. Download Octave.
• MetaTrader (Free) – A free FOREX application. Download Metatrader.
• Microsoft Visual Studio 2008 Profesional (Commercial) – Programming suite. Visit Site.
• Trader XL Pro (Commercial) – An all in one trading solution. Download Trial.
• Microsft Excel 2007 (Commercial) – A must have for any trader. Visit Site.

System Tools

• NotePad++ (Free) – A free feature packed replacement for notepad. Download Notepad++.
• AVG antivirus (Free/Commercial) – Easy to use virus scanning solution. Visit Site.
• PDF Creator (Free) – Easily create PDF files from any application. Download PDF Creator.
• 7-zip (Free) – Open any compressed file you should come across. Download 7-Zip.
• Sync Toy (Free) – Backup or sync your files to a storage device. Download Sync Toy.
• CCleaner (Free) – Clean and optimize your system. Download CCleaner.
• VirtualBox (Free) – Create a sandbox for testing apps on production system. Download VirtualBox.
• KeePass (Free) – A simple tool for managing login credentials. Download KeePass.

Image and Video Tools

• Paint.Net (Free) – A free Image editing application. Download Paint.Net.
• IrfanView (Free) – Open any image file. Download IrfanView.
• VLC (Free) – Play any format video file. Download VLC.

Poker Tools

• PokerStove (Free) – A free poker equity calculator. Download PokerStove.
• PokerHands (Still in Beta Testing Free) – Good draw poker tracking software. Download PokerHands.
• PokerProLabs Tools (Commercial) – A suite of useful tools. Visit site.
• Hold’em Manager (Commercial) Tracking software for hold’em. Visit site.

Links

• It is good to see some new posts on NMT again seems everyone is getting into GO.
• Interesting article on TechCrunch does Google really control the news?
• Zen Habits gives us Seven productivity tips for people who hate GTD.
• NYT Chinese bias for boys causes 32 million gap.
• 12 cool gadgets for eco friendly geeks.
• You do the math, learning concepts rather the techniques.
• Venice to use algae for 50% of it’s electricity.

The Long Run is Really Loooooooooong

It was not until I started playing poker that I made this realisation. I am sure most of you are familiar with the Keynes quote “In the long run we’re all dead”. Basic statistics tells us that carrying out an action that has a positive Expected value will result in profit over a large series of trials. So it should come as no surprise that over a short number of trials you can find yourself losing money as a result of a positive expected value decision.

A Poker Example

To make this more concrete at the $5.2 buy-in sit and go’s on average I have a 13% ROI over a sample of 534 games. If we look at a 16 game block I lost 12 of these games and only won four resulting in a net loss of $63.20. Looking at the short run one could say I am a losing player. Below is my graph of the full 500 games:

Note: Even 534 games is to small a sample size to say I am a winning player.

Trader Lesson: Just as 16 games is to small a sample to draw inferences from so to is 16 trades. At the end of the day you will make the most profit from continually making plus expected value decisions regardless of outcome. Try not to be fazed by a small number of losing trades stick to your system.

Psychology Matters

Depending on your vintage and or educational background you may or may not have heard of Daniel Kahneman and Amos Tversky. These two psychologists developed Prospect theory which is basically a theory that deals with evaluating alternative decisions involving risk. In short the theory evaluates how people evaluate gains and losses.

Poker Example

I lose 2 buy-ins playing NLHE cash games for a loss of $50. I then play 4 $6.50 sit and goes and run very well coming first in three games and 6th in my fourth game. I make a net profit of $55 in my sit and go’s and a $5 profit for the session. However this is a very disappointing session as I have only made $5 and I weight the loss of $50 as much greater then the gain of $55.

Trader Lesson: It takes a lot of hard work and discipline to not put so much emphasis on our losses and not to fall into the outcome bias trap. Our mental state can cause us to make minus expected value decisions. There is no shame in getting professional help to work through cognitive issues that impair our performance.

Note: The best resource on trading psychology is Brett Steenbarger, his traderfeed website has many great articles some recent articles I found useful are:

• Trading Scared is Trading Scarred
• Approaching Markets With an Active Mindset
• Learning How to Trade: Managing the Psychological Risks
• Four Best Practices for Maintaining Your Focus on Markets
• My Favorite Techniques for Overcoming Performance Anxiety in Trading

Rake and Commission Matter

On the face of it both poker and trading should be a zero sum game, that is individuals losses should directly match other individuals gains. Unfortunately due to commissions, rake and taxes losers lose more then winners gain and winners gain less then losers lose. Playing poker has given me a greater appreciation for the effect that taxes and commissions have on my bottom line.

Poker Example

When starting out I like most players started playing $1.10 games that is $1 entry fee plus 10c rake, in these games one is paying 10% rake.  Below is a very crude example of how rake would effect your profitability assuming ROI was the same for both stakes:

Profit on $1000 investment at $5.20

$1000 – 192 games 25% ROI 4% rake

$1250 rake reduces our ROI to 21% => $1210

Profit on $1000 investment at $1.10 Stake

$1000 – 909 Games 25% ROI 10% rake

$1250 rake reduces our ROI to 15% => $1150

Note: This is highly simplified and in the real world ROI incorporates rake.

The image below shows my results from $1.10 Sit and Go’s. You can see that I actually paid more in rake then I  made.

Trader Lesson: Commissions and taxes are often neglected when developing a trading plan or strategy however these two factors are crucial to long term profitability. When selecting a broker you should do a comparative analysis of fees commissions volume discounts offered. As far as taxes go your best bet is to talk to a good CPA or CA and they will be able to help you with this issue. You may be surprised how much money you can save by taking these measures.

The Environment is constantly Changing

In poker and trading adaptability is crucial aspect of success. Just because you have the best possible hand on any given street does not mean that it will still be best hand on the next street. In order to succeed you have to examine your play after each new piece of information becomes available. In poker you also have to realise when your beat and cut your losses just like a trading environment.

Poker Example

I am dealt pocket aces in an 8 handed game blinds are $15/$30. Two players limp in for $30 I raise it to $120 one limper fold and the button and other limper cold calls.

Stack sizes

Me: $1480

Button: $3070

Flop

Limper checks I lead out with a $288 bet button calls then limper folds.

My thought process: This is a very bad flop for me straight draw, flush draw, KQ would make a full house. I make a small continuation bet to hopefully win the pot here. My best possible starting hand no longer looks like it can win the pot.

I check button leads out and puts me all in. I fold he shows Jack Ten making a straight.

My thought process: This is a very bad card the straight just got there my opponent could also have trip queens, best case is he has AK or flush draw. I check  and my opponents over bet tells me he has me beat. Even though it is a spot where technically a call would also be correct I opted for the safe option.

The Odds

As you can see from the above simulation if we put our opponent on his tightest range, calling would have also been an option.

Trader Lesson: Financial markets are dynamic and constantly changing and it is important to realise when these changes will effect your trading plan. In times of late we have seen some significant structural changes in markets and regulations. These changes can prove profitable or costly if you are unsure it is best to stay on the sidelines as hard as that may be.

If you don’t have a strategy you may as well burn your money

It is very important that you have a strategy when you sit down at the poker table. Not only is a strategy crucial aspect of trading and poker but a framework for analysis is also required. I have found when I started playing poker I had no strategy and played very subjectively.

My Basic Poker Strategy

Pre-Flop

• What position am I in?
• How many players are in the pot?
• how many players are left to act?
• What is my M?
• What is my opponents M?

M=Stack size / (Big Blind + Small Blind +Antes)

• What equity does my hand have against opponents range.
• Bet/Check/Fold/Raise

Post Flop

• Calculate Pot odds
• Calculate Outs
• Factor in fold equity and psychological aspects
• Bet/Check/Fold/Raise

Post game

• Review game play as a whole.
• Calculate expected value for any hands that were borderline.
• Use an ICM calculator and do a hand by hand review.

Trading Lesson: It is not enough to just have a static trading plan, you will also need to have a framework in place to evaluate the success in a quantative fashion.  A trading diary is a great way to record your thoughts and reasons for entering or exiting any given trade. Sometimes the post trade analysis can be just as important as pre trading analysis.

Trying to Make back losses is the quickest way to lose

I have to admit that I on more then one occasion I have lost money playing poker and then told myself that I am not going to stop playing until I made that money back. Guess what happened, I lost more money trying to make that money back. On one occasion I lost 6 Sit and Go’s in a row at the $20 level so I thought I would move up to the $50 level and quickly lost more.

Trading Lesson: Sometimes the best thing to do after taking a big loss is to take a break recharge the batteries and step away from your trading station. That money is gone it is a sunk cost and is not recoverable. Don’t take on more risk or stay in trades longer then your trading plan dictates in an attempt to win back your losses

Bankroll Management and Money Management Make a Difference

Risk of ruin is real and no matter what your skill level if you don’t manage your poker bankroll or trading equity properly you could be out of the game. As a trader it is even more crucial as with some financial instrument you can lose more then your initial investment.

Poker Example

We sit down at a table with our last $1435 look down at our cards and see pocket aces, we know that against any combination of two cards we have a greater then 80% chance of winning. We raise the pot to $450 and our opponent puts us all in and turns over pocket queens.

AA vs QQ  gives us an 82% chance of winning. The final outcome is shown below:

As you can see even though we got our money in good we lost our whole bankroll. If on the other hand we had 50 buy ins for this level we would be able to re-buy and continue playing.

Trading Lesson: Don’t risk it all on one trade no matter what odds you are getting. It is crucial you develop a money management plan, it does not have to be complex. A quick and easy plan would be to never risk 2.5 % of your equity on more then one trade or highly correlated group of trades.

Variance is just part of the game

Variability of return’s can be a huge frustration but it is an inherent part of the game and it keeps the gamblers coming back for more.  When you play poker you have to expect periods of negative returns. In the graph below you can see a 100 game downswing at the $3.4 stake.

In these 100 games I did nothing different to any of my other games made the same decisions same plays however the outcome was a loss.

Trading Lesson: As a trader you are in a very uncertain business. Most academic texts will say that a good investment strategy will have a low standard deviation of returns. Some of the most profitable traders of all times had very high standard deviations of returns. My advice would be don’t try and minimise variation to much find a level that is acceptable to your risk profile and learn to accept variance.

There is no such thing as a shore thing

Poker and trading both seem to attract people looking to get rich quick. There is no shortage of people looking to sell you a product or service that will make you money while you sleep or will give you the hidden secret to untold wealth.

Trading Lesson: There are no shortcuts, no hidden secrets it will take hard work, dedication and many failures to achieve true success. Question everything you read and hear, if it sounds to good to be true it probably is.

Don’t Give up Your Day Job

The title says it all. You will hear a lot of poker professionals say this to up and coming poker players however I think it has a lot of value for traders also. I know a lot of people look at trading as a way to make a lot of money quit there job and enjoy the finer things in life. However this places you under enormous pressure, there will be times when there are no trades that meet your criteria but your family still need to eat.

int handlFile;
handlFile = FileOpen(”symbol.csv”, FILE_CSV | FILE_WRITE | FILE_READ, ‘,’);
FileSeek(handlFile, 0, SEEK_END);
FileWrite(handlFile, Bid, Ask, Close[1], Volume[1]);
FileClose(handlFile);

Note: This code above is intended as a very rough solution. Time permitting I will write a proper EA with error checking and better features. This code however should be sufficient for basic tasks. For more information on EA coding I strongly recommend you download the getting started book:

MQL Tutorial

The Non EA Export Option

Can’t be bothered with that coding garbage? Never fear there is a very simple option. Go to the Tools Menu then History Centre a dialog box similar to the one shown below will appear simply chose the currency you wish to export and select a file name and your done. This process is shown below:

MetaTrader really is an excellent platform for learning the basics of trading and trading systems. I would recommend to anyone starting out in currency trading that they download MetaTrader and start exploring. If you want to learn more about Forex Trading I suggest you visit the Forex section of this website.

It has taken me far to long to get around to reviewing Timothy Sykes PennyStocking DVD part II. With a run time of approximately six hours there is a huge amount of content to get through.

The second DVD series picks up where the first PennyStocking DVD left off. This series looks at 2007 and 2008 intraday chart patterns and looks at Tim’s updated strategy. Tim is definitely good at cross selling his products. As with his other DVD’s Tim introduces us to his other products he sells.

There is far to much content on these four DVD’s to go into in great detail therefore I will briefly go over the content on each disc and my final thoughts.

Timothy Sykes PennyStocking Part Deux – DVD One

Some topics discussed in this DVD include:

• Basics
• When to Buy
• When to Short
• More short
• Even more
• Trading

The overview details Tim’s journey very briefly as it is covered extensively in the first DVD. I like how Tim emphasizes the need to have no expectations and to aim to take small losses rather then letting them run.

The DVD then goes on to introduce some technical based rules to help you determine when to buy PennyStocks. The discussion then turns to manipulated breakouts, Message board breakouts, Panicking and squeezes. Extensive real world examples are then highlighted using charts.

When to sell is then covered topics include Technical shorting, spam mailers (manipulative breakdown), message board chatter, newsletter sending dwindles (hype breakdown) and Squeeze breakdown.

In the trading section Tim goes through some rules of when to take losses.

Timothy Sykes PennyStocking Part Deux – DVD Two

Some topics discussed in this DVD include:

• Playing out
• Intraday patterns
• More Intraday
• Fades
• Bounces
• News bounces

In the first chapter of this DVD Tim goes through how supernovas tend to play out giving examples. Tim then talks about some basic concepts and guidelines, finally charts are introduced.

Some common intraday setups are shown. In general Tim will define a concept and then show it in action on the charts. I think this is an optimal way to introduce concepts and makes learning a lot easier.

Tim’s discussion of news bounces is most interesting he makes some very good points that I think every trader should take note of. Patterns not to short are also examined. The final part of the DVD we get to see Tim’s music video “Fight For Your Right in Finance”. Shown below:

Timothy Sykes PennyStocking Part Deux – DVD Three

• Some topics discussed in this DVD include:
• More discussion of the breakout pattern
• How breakouts play out
• Various timeframes use various charting software.
• Media newsletter pumps
• Good odds to short sell into dumb money.
• Boring Breakouts
• Breakouts
• Breaking Out
• Playing out
• Even more

This DVD continues where the second DVD left off. It does not really introduce any new concepts rather it continues to go over examples from the “real world”. The section on media and newsletter pumps is interesting and is definitely food for thought. You have to have you finger on the trigger as Tim put’s it when you buy into hype.

Timothy Sykes PennyStocking Part Deux – DVD Four

Some topics discussed in this DVD include:

• Pumps and Dumps
• More pumps and dumps
• Dumps
• Green Stocks
• More green stocks
• Important Factoids

This final DVD continues to go over examples of topics previously introduced and by the end if it you should have a very strong understanding of Tim’s strategy and general PennyStocking theory.

Manipulated run-ups and crashes are talked about and the difficulty in finding shares to short. Tim then talks about buying these shares on the way up. This is a successful strategy for Tim however I don’t think the average person watching the DVD would be able to execute this type of trade successfully.

The discussion then moves on to green stocks. These stocks had miracle promises with very few fundamentals. At the time commodity prices where high and global warming was a big issue. Tim goes into several examples of these types of companies.

Finally Tim takes us through some important factoids, which are no more then a collection of platitudes which no doubt you have heard before but round off the DVD.

Bottom Line

This is a great DVD and is recommended viewing for any one wanting to trade PennyStocks. You just can’t find this information anywhere else. Tim really knows this niche inside out and back to front. This DVD does such a good job going through the important concepts that I think for most people there is no need to purchase the original PennyStocking DVD.

Pros

• Extensive examples
• Concepts clearly defined
• Unique content
• Simple and easy to follow

Cons

• Not enough intraday content
• Short Selling coverage sparse (In order to sell ShortStocking DVD)
• Not enough detail on use of multiple timeframes for trade decisions

The Signup Process

To signup to the Kirk reports member only section click on member information page. After doing this a page similar to the one shown below will appear.

I choose to pay via PayPal and the process was extremely straightforward. After the transaction is complete you are redirected to instruction on how to log on to the members only section. You will also receive an email welcoming you to the Kirk report. Once you have logged on you will see a clean easy to use interface as shown below:

As a member you get access to:

• Kirk’s stock screen machine
• Monthly Q&A sessions
• Premarket/Afterhours posts
• A market timing indicator
• Recommended Readings
• Tools of the trade
• Educational posts
• Retirement/Lazy portfolios
• Model retirement portfolio

Stock Screen Machine

Naturally after signing up this was the first area of the members only section that I wanted to investigate. At the bottom of the page is a tutorial which goes over how to use the tools effectively and gives a bit of background information. There are quite a few screens that will help you find stocks to play. The screens provided include:

Stock Screen Machine Filters

• New & Hot
• Most Popular
• Consistent Performers
• Losing Popularity
• All Screens

Kirk’s Favourite Stock Screens

• Back Up The Truck
• Cheapo Growth
• Cream Of The Crop
• Good Minds Think Alike
• Market Leaders
• Passing The Bar
• Pounding The Table
• Safety First & Then Potential
• Value/Growth/Momentum

Another benefit of Kirk’s stock screens is the ability to views charts of all the stocks listed with a singe click, download an excel file contain the stocks or a text file. I have found this to be very hand as it allows me to use BulkQuotesXL and AnalyzerXL on the list directly. The image below shows a selected stock screen filter:

The monthly Q&A section is a complete archive of all the past Q&A topics and is all easily accessible on one page. I found it really helpful to see the lists of news that Kirk reads and the blogs he reads. These two lists are both very extensive and contain some sites that even the most seasoned professional may not have come across.  Kirk also has a list of recommended readings which is fairly standard but helpful to the beginner. The tools of the trade section of the website lists in great detail Kirks trading setup and I have to say I am somewhat jealous The lazy portfolio section of the website is of a very high standard and there are lots of resources. In total there are 25 different lazy portfolios presented. At the end of each day Kirk sends all his subscribers a concise email with links to posts along with other relevant information. The final section of the members only section that is worth its weight in gold is the members mailbag. This section of the website goes over all the previous questions kirks members have asked him. There is a lot of content and it makes very interesting reading.

Bottom Line

Becoming a member of the Kirk report really is easy and the value most people will derive will far exceed the initial outlay. If you only got access to the screen machines it would be $50 well spent. The mailbag section and the tools of the trade section make for very useful and interesting reading. If you have been a regular reader of the Kirk report but have been sitting on the fence it is time to take the plunge. The only criticism I have is the lack of comments and community interaction. It would be great to see a members only forum or comments to be enabled on posts. Also it would be good if the recommended reading section offered links to the Amazon page of books presented. That being said a Kirk report membership offers extraordinary value for  money.Well I am off to read some more Q&A’s and mailbag questions.

As the name suggests Tim Raw has very little editing, no fancy production techniques and comes on four DVD’s.

Tim Raw DVD Disc One – Tim Lessons -Approx Runtime: 2hrs 30min

All in all this is a solid introduction to trading techniques and methods. You will find a multitude of generalised information and anecdotes throughout the DVD’s. I found the first DVD to be a bit slow and less structured then the remaining DVD’s yet there were some great tips. It is very helpful to take notes, as the first two DVD’s are not divided into any structured chapters. Some topics covered on this first DVD include:

Lesson 1

• Disclaimer
• “I am not responsible for any of your losses. If you do have any gains I would like to take credit for that, as I have taught you”
• A brief Introduction to who Timothy Sykes is
• The GYGT trade Lesson- Business reality vs Stock reality
• Nov 2007 The introduction of TIM (Transparent Investment Management)
• SEC Pattern day trading rule (intro)
• Tim Alerts (intro)
• A little bit of cross selling other DVD Products
• PennyStocking in Bull Markets
• Are all PennyStocks Frauds?
• An in depth look at the CYGT saga
• Sub Penny shares…. Should you play them?
• PennyStocking success stories and Covester
• How do you spend your PennyStocking profits?
• The Simplicity of PennyStocking
• Limit Orders Vs Market Orders
• A more in depth view of the pattern day trading rule
• A brief overview of ShortStocking concepts
• Trading Psychology a brief overview
• Habits of a good Trader
• Getting Over losing streaks

Lesson 2

• Managing other peoples money
• Starting a Hedge Fund – One man shops won’t work
• Licences needed
• Prop Firms
• The Financial media jungle
• CNBC and Noise
• Alternative Investment strategies
• Recommended Brokers
• Analysts
• High price stocks
• Tax Law selling
• Seasonal patterns

Book Reviews

The book review section was extremely average due to the lack of information provided by Tim. Despite the lack of information provided the books that were introduced were good and definitely important reading. You can gain just as much insight by visiting Tim’s Trading library section of his website.

Below is a selection of the books reviewed for a full list visit Tim’s library.

1. Book of Investing Wisdom
2. The Predictors
3. Mobs messiahs and markets
4. Bernard Baruch
5. Rouge Trader
6. The Man Who made Wallstreet
7. The Rich and how they got that way
8. The next great bubble boom
9. Lessons from the greatest stock traders of all times
10. Sell and Sell Short
11. Trading for a living
12. How to make money selling stocks short
13. Full of Bull
14. Your money and your brain
15. A mathematician plays the stock market
16. Practical Speculation
17. Millionaire traders
18. My life as a quant
19. Way of the turtle
20. Trend following
21. The Complete turtle trader
22. Inside the house of money
23. Fooling some of the people all of the time
24. The education of a speculator
25. Hedge Hunters
26. Jesse Livermore worlds greatest stock trader
27. Reminiscences of a stock operator
28. The wall street jungle
29. A random walk down wallstreet
30. Unconventional success
31. The white sharks of wall street
32. The boy wonder of wall street
33. Wall Street a History
34. Scam Dogs and Mo Mo Mama’s
35. Trading with enemy
36. Market Wizards
37. Morgan
38. Encyclopaedia of chart patterns
39. The Go Go years
40. The new market wizards
41. The wolf of Wall Street
42. Confessions of a Wall Street analyst
43. Running money
44. Wall Street Meat
45. Hedge Hogging
46. The book of Daniel Drew
47. Where are the customer’s yachts?
48. Soros the life and times
49. Sold short
50. Hedge Fund Masters
51. The poker face of Wall Street
52. Fooled by Randomness
53. All about options

After the book reviews the following topics are looked at:

• A Word about Stock promoters
• A Little history Tulip Mania

Tim Raw DVD Disc Two – Timothy Sykes Seminar Part One – Approx Runtime: 1hr 48min

The final DVD’s go through a recent seminar Tim gave. I found these DVD’s to be a very interesting insight into the way Tim trades. For anyone who is unable to attend a seminar in person this DVD is a great substitute. There are so many substandard educational products in the trading sphere it is good to actually come across a DVD, which contains an honest and open view of the industry. Some topics covered on this DVD include:

• Introductions
• A brief introduction to candlestick charting
• Use of stop losses and routing of orders
• A look at a level II screen
• ¾ stocks follow the market
• Bitter sellers an Explanation
• Pig Farming in China – A technical look
• A look at multiple timeframes
• The Kramer effect
• A look at covester website
• Stock MSG boars and Jonathan Levit
• Stocks that aren’t moving
• Everyone has an angle
• A look at a spam stock
• Midday volume dry up
• 10% Spreads! Crazy
• Naked Short Selling
• A few Seasonal Trends
• Stock Market Fundamentals Market Cap
• Breakouts
• Support and Resistance

Tim Raw DVD Disc Three – Seminar Part Two -Approx Runtime: 2hrs 9min

Some topics covered include:

• A discussion of the pattern day trading rule.
• Looking for market inefficiencies.
• A technical look at PR run ups.
• Cup and Handle pattern
• Some morning patterns
• Short Squeezes
• Taking into account all available variables
• Wait for good setups
• Buying Frauds
• Tim’s Favourite Breakout
• A Short Q&A
• More chart patterns
• Multiple timeframes
• Supernovas
• The Crow
• The Death Spiral
• Identifying short squeezes on the level II Screen
• Doubling your losses Newsletter – Read the fine print
• Yahoo finances – Understanding key statistics

Tim Raw DVD Disc Four – Seminar Part Three -Approx Runtime: 1hrs 44min

The final disc which I found to be the most interesting looks more closely at how Tim trades. Topics covered include:

• Examples of simple breakouts
• Short selling into strength
• Fake out Breakouts
• Morning panic
• An example of how Tim researches a play
• Breakdowns- looking at multiple timeframes
• Take losses quickly
• Forcing opportunities
• A look at media outlets
• Don’t trust insider buying
• Liquidity issues
• Plan for everything the night before
• Tim’s routine
• The sites Tim uses
• Building watch lists
• Don’t trust just one data source
• How Tim finds his stocks

Final Thoughts

Tim’s Raw DVD is a great introduction to his PennyStocking strategy and some general trading concepts. Tim’s Raw DVD should be watched before moving on to the PennyStocking DVD and PennyStocking Part Deux. It is evident throughout this DVD series that Tim knows his stuff when it comes to the Penny Stock niche. In the fast pace world of finance a new guru pops up every few months and then fades into obscurity. Tim’s profits and trades are well documented and transparent and his blog details the day-to-day happenings and events, which are pertinent to PennyStockers. I was very impressed with this DVD it is packed full of trading wisdom.

Pros

• No assumed knowledge.
• Presented in easy to understand manner.
• A vast amount of topics covered.
• Allows new trader to gain an insight into how a successful trader approaches trading.

Cons

• Dis-Jointed in parts
• DVD chapter selection sparse.
• Book review section not very informative.

Bottom Line

A vast array of topics are presented in an easy to understand manner. This is a perfect DVD for anyone who is considering PennyStocking. The production quality is raw but the content presented more then makes up for this. Tim is really maturing as a trader and educator (Maybe the influence of a good woman??).

A Master of PennyStocks gives us a master insight into the world of PennyStocks. I must say thank you Tim you have opened my eyes to opportunities that exist that I would have never even given a second of thought too. Although I don’t currently trade Penny Stocks the perspective and insight presented is still very relevant.

• PennyStocking – Part Deux
• ShortStocking
• Tim Raw

So stay tuned 2009 is going to be a big year for global financial markets and a big year for TraineeTrader.

“ASIC will provide a no action letter for hedging of existing positions of market makers arising from their client business. ASIC will settle terms of that letter today, but it will be to the effect that the prohibitions on covered short sales will not apply to hedging a position that was taken by an entity prior to 22 September 2008 as part of its business of dealing as principal in equities, options or derivatives (whether OTC or exchange-traded) to fulfil orders received from clients or to respond to a client’s request to trade, in each case before that date.”

You can read the full details of these recent regulatory changes below:

1. 08-204 Naked short selling not permitted and covered short selling to be disclosed. Friday 19th September 2008.
2. 08-205 Covered short selling not permitted. Sunday 21 September 2008.
3. AD08-20 ASIC advice to ASX market participants regarding hedging existing transactions.Monday 22 September 2008.

With these measures and the US governments Nationalisation of struggling banks and financial institutions there was only one way the market could go today and that was UP. The S&P ASX 200 intraday chart is shown below:

Note: The unusual 11AM Open time.

The other benchmark Australian Index the All Ordinaries index also performed remarkably well to post it’s largest 2 day rally since 1987. The All Ordinaries index intraday chart is shown below:

It will be an interesting week ahead to see how banks and intuitions engineer ways to profit from this temporary regulation.