Monday, April 28, 2008

Avoid The OverTrading Trap Ahead Of FED Day.

Markets will always be very choppy ahead of all FED meetings. Gotta curb the urge to overtrade. I had a great trade in AGU in the morning and gave it all back and closed down on the day due to over trading. No more of that tmrw.

Trade Du Jour: Double Bottom 1 Min. Chart Reversal

Sunday, April 27, 2008

The PayOut/PayBack Cycle: Excerpt from Bo Yoder's Book, Optimize Your Trading Edge

In his book, Bo Yoder's writes: 

"For every style of trading there will be a "perfect" market environment. When the market is aligned to the strategy that you are trading, every trade will work itself out smoothly, losses will be far and few between, and you will feel on top of the world as you watch your profits accumulate! ......Sooner or later the market environment will shift, if ever so slightly, and losses will once again begin to appear.....This constant cycle from "zero" to "hero" and back to "zero" is why i believe speculation as a business has such a high failure rate."

This is a subject that you will hear all top traders talk about(Jason from Leavitt Brothers did several videos discussing this important issue).

This i think is one of the many keys to trading survival. The trader's ability to adapt very quickly to an ever changing market environment.

For example : Traders who flourish in a momentum/trending market will take overnight or swing positions in highly shorted and/or 'MoMo 'stocks,  ride them out for big squeezes and bank 'big money' . This strategy works great: you'll often hear traders say 'trading is so easy'. Mistakes are quickly recovered and bad trading habits are rewarded for a lack of a better term. Many traders will even feel unbeatable but once this trading environment that was so conducive for that particular style starts to fade, this same strategy will be responsible in taking back most of these traders' hard earned gains that they accumulated during trending/Momo markets simply because they failed to recognize a market shift.  As the markets ebb and flow from trending to choppy to corrective , trading styles also need to also ADJUST IN ORDER TO ONLY KEEP YOUR GAINS but also SURVIVE.

As traders who wanna survive and be very good at this game, it is vital that we analyze and recognize quickly what type of market we are in. It's not about being "bearish" or "bullish" its about being a "chameleon" and by that i mean, willing to ADAPT to the constantly changing market environments and never stubbornly holding on to one bias blindly. We need to be ahead of the 8 ball and rarely behind. The quicker you recognize the shift, the more money you will keep and make down the road.

Happy trading!

Saturday, April 26, 2008

The Cutest Setup Ever!




Sector is REd HOT right now and this stocks, tho new, looks poised to breakout soon.

Wednesday, April 23, 2008

Gold Almost Setting Up?




PreMarket Thoughts

With AMZN and AAPL looking weak and the futures to be pointing to a weak open, I am thinking I wanna be long at the weak open, not short. Looking thru tonight's charts, i think a weak open in the following stocks is buyable: AG, AGU, CF, POT, HES. JOYG, V, VMW & WFT. My gut tells me rally tmrw, hopefully a very weak open to kick start the day.

Good trading.

Only One Setup To Watch Tomorrow

Tuesday, April 22, 2008

Trade Du Jour




The past few days I have been finding good success in going long strong stocks that open weak. Doing my premarket research and setting a game plan of 3-5 stocks to watch. These are stocks that were very strong the previous day. I 'hope' for a weak open or a gap lower and then i zoom down to the 1 and 5 min. time frames and look for 'corrective' declines and then get long and ride out a reversal. Needless to say, I had some amazing trades which i sold way too early i.e. POT on friday, opened down $2-3, then went on to rally $10. At least i made about $1500 on it.
HES, today worked out great. it opened $.40 cents lower, decline looked corrective and i went in with 1000 shrs right away and the stock never looked back. I could have milked some more out of it as evidenced by the chart but i am pretty happy.
These past few days, i have been doing well with this strategy. i make my money early, usually done by 7AM(pacific time) and i am done for the day. 1-2 trades per day. Simple, no over trading, trade the very active first hour reversals, avoid the afternoon chop. Come back at noon and see if there's anything else worth playing.

happy happy :-)

Monday, April 21, 2008

Friday, April 18, 2008

Hypothetical Trade IN GOOG April 500 Calls

I have been paper trading options lately. I made a $5000 hypothetical Investment in GOOG April 500 Calls trading thursday at 60 cents right before the close of thursday's session. I would have sold it right at the open and it was trading at over $32. A sweet $200,000 return on a $5,000 outlay overnight. If only it was for real.....

One More Reason I Need To Trade Options: GOOG CALL!!!

View By Expiration: Apr 08 | May 08 | Jun 08 | Sep 08 | Jan 09 | Jan 10

CALL OPTIONS Expire at close Fri, Apr 18, 2008

StrikeSymbolLastChgBidAskVolOpen Int
320.00GGDDD.X219.20Up 84.40219.50220.1020362
330.00GGDDF.X209.50Up 85.60209.60210.2016599
340.00GGDDE.X199.70Up 82.30199.50200.2015992
350.00GGDDJ.X189.50Up 87.90189.50190.10176212
360.00GGDDL.X179.50Up 87.90179.50180.2047134
370.00GGDDN.X169.20Up 88.50169.60170.20387664
380.00GOPDP.X159.20Up 87.70159.50160.2017270
390.00GOPDR.X149.20Up 84.20149.50150.20666858
400.00GOPDT.X139.20Up 85.20139.60140.20184892
410.00GOPDB.X129.20Up 85.40129.60130.106011,389
420.00GOPDD.X119.30Up 85.80119.50120.202892,714
430.00GOPDF.X110.10Up 84.30109.50110.108513,097
440.00GOPDH.X99.20Up 78.7099.60100.201,3412,794
450.00GOPDJ.X89.80Up 74.5089.6090.002,4428,405
460.00GOPDL.X79.60Up 70.1079.5080.104,6636,836
470.00GOPDG.X70.10Up 63.8069.6070.203,8259,423
480.00GOPDI.X59.70Up 56.2059.5060.106,63613,611
490.00GOPDK.X49.80Up 48.2049.6050.204,81312,251
500.00GOPDO.X39.80Up 39.2539.6040.2011,15318,052
510.00GOPDU.X29.75Up 29.4529.6030.206,02311,055
520.00GOPDV.X20.00Up 19.8319.6020.0010,2456,623
530.00GOPDW.X10.00Up 9.909.5010.0026,5926,094

Thursday, April 17, 2008

Bo Yoder NewsLetter: Giving Him Respect Where Respect Is Due

Why do i love Bo Yoder?

I think Bo Yoder is one of the best traders i have ever known. I have been following him since the 2002 bear market on HARDRIGHTEDGE.com He posts his newsletters there every couple of days.
I recall him using the same exact technique of spotting higher lows/higher highs and lower highs/lower lows. SIMPLE but EFFECTIVE!!! He has been SPOT ON calling this bear market as well as the rebuilding into a 'bullish' market as we have seen lately. Anyone who actually took the time to read his newsletter when i post them on my blog will give this guy the respect that i have for him. He is truly gifted with the 'gift' of being a successful trader and that 'gift' is to read the charts in a neutral and unemotional manner.
I will never forget March 2003 when he called a higher low on the indexes and called it the start of a new 'bullish' market. I was very very skeptical as sentiment was so negative and i was kind of a newbee back then (Nasdaq dropped over 80% from the March 2000 highs to the October 2002 lows). Can you just imagine how bad sentiment was????!!!!! It was truly a very dark and gloomy time in the markets. So, to hear Bo Yoder call out in Eureka that we are entering a new 'bullish' market was a very bold call. Ever since that magical day, the markets have started a multi year bullish run and as the market topped out in October 2007, GUESS WHO CALLED IT??!! Yes, BO did! and he even predicted a crash in January 2008 and we pretty much got it on Jan. 22nd 2008, the DOW futures were down 400 pts in the premarket before the FED came to the rescue.
Do yourself a favor and read this guy's newsletter when i post them: He is THE BEST AROUND!

I just bought his book yesterday: Optimize Your Trading Edge on a recommendation from my buddy/trader Johnson

His Latest NewsLetter:

Wednesday, April 16, 2008

Something To Ponder......

I heard a very informed guy who does his own work say that 10K invested in the S&P in 1990 was worth 41K in 2006. Buy and hold. Not bad. But that same money invested with perfect market timing was worth 600K.

But invested in the right sector each quarter, was worth 6 million.

Index Charts


Setup Du Jour


Monday, April 14, 2008

Friday, April 11, 2008

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