Thursday, October 7, 2010

New Stock Setups and Random Musings

In my +13 years of trading, i have never seen a market that is so treacherous. Be aware of bigger/stronger forces betting against you. Algos and computerized trading models have altered this game until further notice(i.e. flash crash event). I repeat: Be aware of bigger/stronger forces betting against you.

The fastest to recognize and adapt win. Avoid the very 'popular' stocks and especially the 'popular' patterns: Head and Shoulder patterns covered on CNBC, death/golden cross, hindenburg omens, etc. All this is noise that sells newspapers and loses you valuable capital.

'Fuckery', a term geniously invented by stock trading master THE FLY, wants to get you in, stop you out, and rip without you. Use responsible position sizing and allow your stocks to wiggle. A trader is usually much better off with a wider stop loss than a stop loss that is too tight. Tight stops unless EXTREMELY experienced with short term trading time frames is

If new to trading, stick to trading stocks on the long side. Shorting is a skill that is acquired after many years and many painful lessons. Shorting is a whole different tactic that requires a trader to anticipate.

Earnings season kicked off today, know in advance what you own and when these companies report their numbers. $$ Avoid careless blow ups.


PhoenixTrader said...

The confidence with with the Tech stocks were hammered and then ARUN hammered again next day goes to show that there are big guys playing us. Watch the volumes in all hammered stocks. Then imagine the fact that they waited for a strong reaction and bounce and then shorted on that bounce! Total professionals (or co-incidence). The stoplosses are causing commission losses. Trading breakouts/ even a bounce from support is risky. This is bold manipulation by sector pros out there.

Stewie said...

amen brother. This game is changing big time.

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