11 9 23 RECAP

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3 days up SAVA example

Consistency is KEY in trading

- People tend to forget that these gains didn’t just happen in a day. Sure, the profits were taken in a short period of time, however they were the result of a long process of education, trial and error, and even failure. 

- You must first learn consistency and give yourself the BEST shot at maintaining this career.

Here are some tips to improve your consistency:

1. Set Realistic Profit Goals

Saying that you want to make $200/day is more achievable than saying you want to make $100,000 from trading. This allows you to come to the market each day with a clear, realistic goal that will help guide you on your journey.

2. Don’t Take Unnecessary Risks

It only takes one trade to take you out of the game, and as we saw last week, no one is immune. Don’t try to nail that $10,000 trade if it exposes you to additional risk. Follow your trading rules and make sure you live to trade another day. Big profits will come with time – you shouldn’t be taking huge risks to chase them.

3. Appreciate Your Progress

Trading is great because it’s a constant challenge; you can always do better. That being said, this makes it so some traders are never happy because they always want more. Learn to appreciate your progress. If you are consistently profitable, you are doing better than 90% of traders and you need to recognize that. Try to understand the necessity of each step in the process of becoming a successful day trader. Even if you only make $50/day from trading, you are on the right path, as long as you remain consistent. Higher profits will come as you keep working at it.

4. Don’t Compare Yourself to Others

It’s easy to see traders making huge profits and wish you could achieve those same results. Suddenly, a $1000 gain may not be too exciting when you see someone else make $50,000 from a similar trade. DON’T COMPARE YOURSELF TO OTHERS. You don’t know their story. You don’t know how long they’ve been trading or how much capital they started with. Comparing yourself to others causes you to depreciate your own success and set unrealistic goals.

5. Understand Outliers and Take Breaks

If you have large profits or a big loss one day, sit back and take a break. You need to understand that these trades are outliers. Often times, traders experience the thrill of a big gain and come back to the market trying to recreate this success. This can be dangerous! This would be like winning the lottery and then going back the next day to load up on more tickets. Appreciate your win (or learn from your loss), and get back to trading consistently.

Looking for the "stormy weather" stocks.

 What do I mean by, "looking for the stormy weather?"  Quite simply, you can only make money on a stock if it is moving... or if it pays a dividend.   As a trader, you need a stock to be active.   You can't be trading stocks that are not moving.   Also, when you identify a stock that is moving, you don't know how long the move will last.  How many times have you bought a stock when it was really active, only to see it calm down and become "blue sky, sunny and no wind" or "dead."  As in dead money.  

So, the key is identifying a "stormy" stock.  Trade it.  Be out before the storm stops.   Move on to the next "storm."

That's the goal - each day. Trying to focus on quality and if they're working great but I don't want to exchange my time for hoping during the day. Either its working or I'm moving on.

Trade Rotation (float)

X - ATGL Short

 

Here is a trade I took on the short side.  This trade did not work out and I held on to it way too long.   I did not obey my $0.10 stop, which would have been $24.11.  

K - ATGL Trade

 

This was a trade I took based on my ATGL system.

1) Stochastic heading higher between 18-20.
2) Must close green (NOT solid) before buying (you can buy at end of day is likely 
to close green.
3) Set stop $.10 below the low of first green bar of buy signal.

VDSI still going

I was pleased with VDSI today as were many others in this stock who are long. As you know, I added this one to my 401(k) about a month ago. We can't expect VDSI to do this every day but lets hope it continues its upward movement. I am still long VDSI in my 401(k).

bad base

As mentioned earlier, I sold JSDA. Too many negative happenings. To name a few:

1. bearish candles (Bulls can't win lately)

2. OBV down

3. Support is being tested and broken.

4. MACD made lower highs on stocks new highs.

I don't feel comfortable being long on this one right now!

The base here seems a little loose as well. (Good bases normally fall 20% to 40% or 50% from their highs. Go any deeper and a stock faces even more steamed holders that have a loss. It's tough to overcome this "overhead supply" of potential sellers and hit new highs. this from IBD)

Institutions are the ones that support stocks in their bases. You want to hitch your wagon with them not the retail side.

Sold JSDA

I took JSDA out back to the woodshed today. The stock just doesn't seem to have any strength. The bears seems to get this stock every afternoon. My feeling is that the retail accounts are buying in the AM and the Institutions are selling during the day. Anyway, I am not going to wait around to see what happens. Sold at $13.67. Shit...

JSDA showing weakness

Well, JSDA has been a poor performer the last couple trading days. If the stock breaks below its prior resistance, we are going to have to jettison this puppy. To think this stock was gong to trend. Now looking back at the stock, it is too volatile to trend. There is too much emotion attached right now. Take a look at HMSY. This stock just moves along, nothing too fancy. Just slow and steady, the way I like it.

JSDA did offer some great opportunities to make some money. I was using the wrong approach though.

AM Notes

Yesterday VDSI was downgraded to Hold from Buy. The stock naturally traded lower. I have not touched this position and continue to hold my shares. I did not see shares pierce any key support areas on the chart. Lets assume the trend is still in place for now.

JSDA has held its ground. I still have my shares bought at $14.49.

AM Notes

The market seems to like the Feds action or inaction I should say. Investors are also bidding up the VASCO shares.

I bought JSDA the other day at $14.49. Funny thing, I don't know if you noticed but take a look at HMSY and JSDA charts and notice the same pattern in each. HMSY is going up now but Jones is down. The only thing I can think of is that the slope of the trend line for JSDA is steeper than HMSY. Maybe a little too steep. I am sure Cramer's comments did not help JSDA either but that can't hole too much weight. Anyway, I am holding onto JSDA.

VDSI / HMSY

I continue to hold VDSI in my 401(k). The stock look solid still. It is stabilizing after its last run up.

Another stock that looks interesting is HMSY. The stock, much like VDSI has been going through a basing pattern after its last move up. Today the stock moved higher. I do not own HMSY.

How Many Stocks to Watch?

• Pick only 1 or 2 issues to watch. You are more likely to do better by following a few stocks well than following a bunch of stocks poorly.
• Use both physical stops and limit orders to control risk.
• Successful swing trading requires little knowledge about the companies underlying fundamentals.

VDSI

Like I said, I sold VDSI in the trading account and held it in the 401(k). I bought VDSI during wide price bar action, which is risky. I should have waited for the stock to "cool" before purchasing.