Sunday, November 1, 2009

Back In Business

After a few months away from the market, I'm ready to get back in. I have learned some valuable lessons over the summer. Discipline is key! It is easy to forget how important that is.

Regardless, I will be making some changes. My journal will be updated and redesigned. I will be posting a weekly review that reflects the weeks trading and offering some random conversation when interesting things come to mind.

Tuesday, April 28, 2009

Had the seasons first softball game. It felt great to find some time for outdoor activity! There were kids throwing water balloons, dogs minding there business, and people walking on the track. People were enjoying themselves. With all the excitement on this perfect day, I almost missed the people with face masks. At first it was a women walking down the track wearing a green mask. I shrugged it off and thought of all the allergies in the air, until I noticed the man in the bathroom, the little kid drinking water, and the teenager walking her dog. They were all wearing masks! Is it the fear of allergies? I've been an outdoor enthusiast for some time and have never witnessed so many people outside wearing face masks. Is it because of the swine flu that the media has exaggerated? Maybe! My two friends were at the gym, both hypochondriacs, claiming that they could have this epidemic like flu. Its ridicules! The media has designed this epidemic to stir up attention. There are about 64 cases of this flu in the USA. Nobody has dead in our borders from it. It is estimated that more than 13000 people die per year from the common cold. I don't get it!

If you listen to stock market commentary there are people who claim that its the fear of this flu that has kept the markets at bay. I think this is ridicules, too! The market is overbought, the economy is still in need of repair, and people fear for recession. Yes, the market has had a great run, but there are technical indications that this market is due for a short-term correction within this bear market. Price alone determines what the market is doing! If a trader gets trapped with all the commentary and predictions of were this market is going, they will lose faith and money. Don't get caught up in the latest fad or media hysteria. Watch and observe price!

I am looking for a needed sell-off. The S+P futures have been testing support over the past two days. The cash markets open and push equity prices higher only to fall at resistance. The markets lose momentum toward the end of day with volume pointing the way. When this support level breaks, I will commit short positions until the next support level.

Wednesday, April 22, 2009

Volatile and uncertain day! I was busy with my real job most of day but did manage to sneak and peak at what kind of environment the market was in. It seemed that all of the major indexes were enjoying a positive day despite some looming concerns. The Dow and S+P both ended negative suffering from a late day sell-off. Tech maintained a positive close into AAPL and EBAY earnings release. With good results for both Apple and Ebay, I would expect some continued positive momentum with the technology sector. Of course that depends on what happens during the conference call.

I entered a late day trade for 100 shares of FAZ. I saw some heavy volume and buying power taking the 3X leveraged inverse financial ETF northbound. I decided to hop on board and see how far north it goes. I entered the trade at $9.65 and set a initial stop at $9.23. I will be looking for $10.53 - $10.83 exit. If the financials start to crumble and FAZ gaps up, I will set a $.30 trailing stop and ride the momentum until the resistance mounts. I still feel that the market is due for some correction and financials should lead the way to the downside. However this isn't an emotional game. I will maintain discipline and observe price action for all decisions.

Tuesday, April 21, 2009

Initially, Trek Trader will serve as a personal journal that embraces my experience. Its purpose is to report on daily commentary, trade activities, educational information, and different strategies that I will utilize. Its a transparent forum that gives me the opportunity to share my adventure in the volatile world of trading. I strive for profit using disciplined risk management and understand that the market moves according to its own design. I want to catch what I can and minimize any damage that blocks my path.

The end goal of Trek Trader is to interact within the trading community, to mark itself as a home base--a base of operations, where traders can trek market dynamics and report what they know and have learned. Trek Trader will serve as a trader's community link. The design is meant to inspire people to trade ideas, thoughts, and strategies on current market conditions.

Trek Trader will offer a forum for both the new and experienced trader. The site includes a trader log link that reflects individual trading styles and acts as a diary. Our Trade Plan helps inspire discipline. The education link sends the new trader on the road to success. If you plan your trade and trade your plan, you will fill your pockets with cash.

Trek Trader welcomes new ideas and people. It is looking for new recruits who want to help shape its path. If interested in contributing, please contact us.

The Trade Plan

Trek Trader Trade Plan

This trade plan should act as a map that can guide the investor to a profitable journey into the global markets. If a trader is disciplined and operates within this guide, that trader can realize the potential of a successful investor. Every trade should be made with strategic consideration with a emphasis on research and protective measures. There are no short-cuts or quick trades that can realize consistent profits. A trader must think before they act. Please trade your plan!

Pre-Market:

1) Big Picture Identification:
  • Identify the direction of the market.
  • Identify sector performance relative to S+P 500.
  • Identify strong or weak stocks within each sector.
2) Watch List Preparation:

  • Identify 200 MA on the 3-min, 13-min, and 60-min charts for stocks and Indices.
  • Identify daily 5 MA and 15 MA for stocks and indices.
  • Identify overlapping support and resistance levels for stocks and Indices.
  • Note daily stochastic for stocks and Indices.
3) Review notes.
4) Review News.

Entering Position:

1) Set-ups:

Exiting Position:

1) Use Set-up Exits.

2) Stop loss = 2% of total account size on any one trade.

3) Stop loss = 1R of position (R = Avg. Risk from trade log).

4) Close position at major area’s of support and resistance.

5) Deploy trailing stop if position moves significantly to lock profits.

Define Stock Characteristics:

1) Discuss Pro’s and Con’s of each stock?

2) Define Time Frame (Intra-Day, 2+days, weeks)

3) Size of position?

4) Define risk and reward?

5) Long or short?

  • Trade only those stocks with strong entry and exit points.
  • Trade Long, stocks with favorable fundamentals and technicals.
  • Trade Short, stocks with deteriorating conditions.
  • Trade at support and resistance.
  • Tighten trailing stop as it moves closer to exit point.

After Market Closes:

1) Log all trades.

2) Evaluate trades.

3) Evaluate Breaking News.

Weekend:

1) Evaluate and Update Trade Log and Trade Journal.

2) Wall Street Journal

3) IBD

4) Watch for Breaking News that can affect the market.

5) Evaluate Big Picture and define possible trends.

6) Study one particular indicator, market, report, etc about any market.

7) Review Economic Calendar.