Ideal Clean Setup - F'n Beauty

$CBI - beautiful...great trade to end the short week

This wasn't my trade so I cannot take the credit for it, but I did however trade it and wanted to post it because of the beautiful setup. Just look how clean this set is, entry was right there! It went up, came down, chilled out and then BOOM the buyers came and the volume spiked up and this stock just shot. Great play! This is the type of trade that can give a trader his balls back. *right click picture, open in new tab*

$SBUX Buy or Wait?

$SBUX

A few days ago at work my only friend Mr. I won't name him approached me and asked me if he should buy $SBUX...so I told him relax, don't get so emotional and let me look into this for you. He went on about how $SBUX is expanding and going into China and has new teas and how he is obsessed with this company. And still, I remained calm and told him relax.

To help him make a decision, I created the following charts and analysis.

Monthly Chart

Below I have the Monthly Chart of $SBUX, the lows way way back in the days is the beginning of 2009, since then like most stocks $SBUX has been in a massive uptrend (refer to the green dotted trend line). But as you can see, it hit the $58- $60 range twice. Right now $SBUX is at its highs, its near the $58- $60 mark again. Personally, I would wait it out and let the stock complete the "M" formation that it is making on the monthly chart, possibly a pullback in the the $45 range would be a reasonable buy. I am not saying this stock has no upside potential, it can go as high as it likes and if you are that type of investor who believes in long long long term growth then shit buy now! But if you want a calculated entrance into $SBUX, either let it close above $58-$60 range and monitor it, but if it does not do that wait for a retreat down to the bottom of the range around $45. *right click chart, open in new tab*

Weekly Chart

Here we have the weekly chart of $SBUX illustrating in a bit more detail what the stock is up to. Again I didn't do no magic I just switched the chart time from monthly to weekly and left my drawing on. The weekly chart also tells the same story. The weekly chart how ever does show an uptrend, if look at the $45 range when the stock was there last it has been in an uptrend ever since, only something massive can stop this uptrend like what is happen now, but buying in this zone really puts the buyer at a disadvantage as the stock can just as easily go back to $45. I do however like the $50 mark as a good exit area if I was a buyer right now and the stock didn't go up and rip through $60. So for someone investing 100 shares right now, that is potentially a $700 risk that they must be willing to take if the the stock doesn't go up as planned, then I'd make $50 a good and reasonable spot to exit. Then you can reassess the trade, if it goes down to $45 get back in. But why waste your time and money? Only buy when you need to not when you want to, so just wait till $45, if not then wait until it goes above $60-$61.  *right click chart, open in new tab*

Still working on the Petting

$PLCE

$PLCE from the opening was a wild stock. Check out its 5 minute chart on the right side of the picture, the candles, the movement, its huge. Each 5 minute candle represents almost .40 - .50 cents of movement, now imagine what kind of impact that can have on your trading, that is a lot of price movement that you have to stomach. I tried to short $PLCE at the spot where it says "short" it worked, I honestly thought it was going to break down further but it did not, stupid fake. So what happened? I had to cover my position, I covered it up early because I knew once PLCE went back above 45 it would just explode, that is exactly what happened. *Right click on picture, open in new tab* to review it.

$STX

Now even though $STX did fake me out the first time, I still had the confidence to re-enter the trade for the second time once it broke below its original points. So as you can see the number "1" indicates my first trade, I shorted there, THEN immediately $STX shoots back up to my stop and I obviously got out of the trade knowing that OK, take it easy, this buffalo wants to play now. So then I waited and waited, I kept an eye on the buffalo and I knew that it was weak, I knew it had to be below its previous low in order for it to break down even further, so look at the number "3". I re-entered the trade there, again stupid buffalo shoots up again, this time I kept it cool, normally I would consider grabbing more shares at the highs in this care around 36.35 - 36.50 (or near the top red dotted line) but I didn't, 99% of the time it has failed on me so I kept it cool and told myself  "I will only add more shares into the trade if it breaks certain price points" and that is why you see all those extra numbers indicating all the places I found it was safe to keep grabbing more shorts. DO YOU SEE how nice and clean $STX is compared to $PLCE? Give me a HYFR! I liked this trade, I was in control and had the confidence to add into my position as it broke price points, I normally don't trade like this, normally a trade is supposed to GO the way you initially planned it to go. But this was handled with care and love unlike $PLCE (for those who don't know what $PLCE is, its THE CHILDRENS PLACE store) *Right click on picture, open in new tab* to review it. 

Hate / Love these Late Trades

$STX

Today, STX did me good and bad, but deep down inside I knew I had this buffalo it was just being lazy and not falling with the market when I wanted it to. Even though today was a down day, I started the day off with  2 negative trades and also trades $STX twice it I stayed in it because I knew it was way wayyyyy over bought today and it was about TIME this bad boy went down. It did fake me a lot, the worst thing that happened today is I left my order pending and I didn't even know it got filled (that is why texting and trading is a horrible mix, worse than texting and driving).

It is 12:38, I start work at 2 PM, whyyyyyyyy do I have to suffer and close my trade. Whatever, trade closed, I started $STX with a loss of -$15 but ended in the positive after backing off and taking time to understand it. Now I can't do anything because I closed the position due to time constraints. But I will come back today to update with full charts.

Today was a slow day, a lot more calculated and relaxed than say how I traded 2 weeks ago, updating this blog and following a few simple rules is paying off in the sense that I don't enter trades that are for sure losers. There is no more guess work, every trade I know why I have entered and have a better understanding of what to expect.

Other stocks that I traded today: $PLCE + $INTU - both losing trades

Exhibit 1: How I pet the Buffalo

$APOL

The charts below illustrates the buffalo I pet today, if you see the setup it was quite clean, the buffalo was tamed and I knew exactly what it was doing. This buffalo got caught red handed just chilling out (stupid buffalo was eating grass down there), when a stock (buffalo) chills out after some serious movement it a good time to assess the risks involved and also to figure out a good strategy to trade the stock. Both the 15' and 5' time frames told me the same story so I took advantage. Mission Complete. *To view any pictures, right click on picture, open link in new tab*

Turning into a hunter: CaveMan Petting

$APOL - How to Pet the Right Stocks and Think like a CaveMan

Looking at my last say 2 weeks of trading, (for those who are regular readers, I guess I'm the only regular reader) but if you are and you're keeping it a secret shame on you! Basically, patience pays is really what I mean by this cave man relation to trading stocks. The caveman will follow the buffalo, the cave man will sleep with the buffalo, eat with the buffalo and understand the buffalo's behaviors not because the caveman wants to marry the buffalo, it is because the caveman wants to take the buffalo home to cavewoman.

If CaveMan saw a buffalo and ran after the buffalo there are 3 possible results:

1) Buffalo wins
2) CaveMan Wins
3) Both Lose

In trading, option 1 will happen, option 2 will happen, but option 3 never occurs, the market never loses, the market doesn't care about you attempt to buy 100 shares of $AAPL. The market will how ever EAT YOU alive when you don't know what you are doing.

But if CaveMan watches the buffalo for a few hours, a day or two or even watches the entire buffalo family for weeks, Caveman will have a better understanding of the buffalo's behaviors, weaknesses and also can call his CaveMan boys (who all have the same name, CaveMen) and take this buffalo down.

Now, lets apply this to trading stocks, how are you gonna wake up at say 9:15 am, brush, shower, shave and so on and try to be ready by 9:30 to trade? You gotta be CaveMan, you gotta know what you are getting into and why, Buffalo can easily wipe out CaveMan with its horns. What if CaveMan saw a buffalo for the first time in his life and tried to pet it? You think Buffalo will roll over and accept that? NAH! Same with a stock, you can't just start petting stocks, you gotta know what the stock is up to, why is it doing what its doing and then only you can pet the stock.

You only gotta pet the right stocks to win in this game. Out of  10 Buffalos 1 Buffalo may stand out as the easy one, so just be patient, relax and pet that buffalo when you want to, not when you need to.

It's all about knowing what you are getting yourself into. I will come back and update my Buffalo of the Day tonight!

Tradeless Friday

Friday March 22/2013 was a trade less day. But I will take some time to talk about my long term holdings:

$AMD

AMD brought back hope earlier this week but during the last two trading days (Thursday / Friday) it deteriorated like a piece of shit. As you can see in the chart provided the two red days totally blew all the gains it made earlier this week. Now it looks like it will head for 2.40 range and possibly lower. This is a long long term holding. I am waiting until it pops above 2.90 range and then the stock will have upside momentum. Until then it will keep bouncing around between the range of possibly 2.20 - 2.75 which is annoying.

$COH

Now when I bought COH I examined the gap on the daily chart and understood that as long as it stays above 50 I am happy and if it goes somewhere down to 46 range I will be out. Only invested 44 shares so the share amount is not huge (as the damn share price is so high) but if $COH goes to 55 or above where the 200 moving average is then that is a nice target. I am comfrotable in investing in $COH but not day trading $COH, its intraday trading setups are dirty, fakey and will kill your account + your mind.

Click Here to see current price of $COH

I will update my other 2 long term holdings another day. One of them is quite entertaining. Check out $AFFY

Have a nice weekend! Time to go roller skating!!

March 21st Plan

09:11 AM

Stocks that I'm going to be watching:

Gap Up: 

ITMN - long above 10.10 or wait for a pull back to 9.80 and look for a nice entry

LULU - if it stays above 64.50-64.60 then it looks like a good long, if it breaks this level to the downside then wait for a long around the 64 zone with the correct set up

The One that Got Away

FDX - Was in my Plan - did not trade it sadly

Well I had everything written down for FDX and what to do with it, but the only reason I did not short the stock in the  morning because I did not see a legitimate candle formation to back up my plan. It worked, it actually worked great but I couldn't take it. You you need balls to take plays like these, very well calculated, I looked at everything, but no candle confirmations or setup.

APC - Should Have followed my IDEA and been patient

Again I had this play all written down on my paper, I got impatient and as you can see being impatient didn't pay in this play. My original plan was to wait for this stock to go to 85.50 (it went all the way down to 85.60) and then I was going to look for a buy entry. But me being impatient, I bought this bad boy at 86.82 thinking that its going to go to the moon. Which is obviously didn't.

GEVO - Patience lesson #2 - It will kill you

Again, had written down in the morning "wait for GEVO to go to 2.20 area" and then look for a buy setup, what do I do? In the first 5 minutes of trading I buy this piece of SHIT!...again, same as APC (the stock above), be patient, if you already know what to do whats the harm in waiting for that opportunity to come to you?? BULLSHIT! 

It Only Takes 1 Right Trade a Day to Make your Day

WAG

Above an ideal short setup is displayed. WAG boosted HUGE from the opening as you can see, but it did lose its breath and that is where the opportunity for a short came in. A stock like this is very hard to catch in the morning, LOOK at what it did, it went almost 90 degrees UP, the bars are so long which don't really create the right environment to long unless you really know what you are doing. But once it relaxed, reached its peak and started to break down again I saw an opportunity. Key thing to remember: Always wait for confirmation of the stock getting weaker, in this case it came down from its break, relaxed for a bit, went sideways (which is a sign of weakness) and then finally it broke down. It did however react very late to the market breakdown and that is what pissed me off the most.

SRPT

The chart above of SRPT displays what NOT to do when trading. compare how clean the WAG setup is compared to the SRPT. This is just disgusting because there is no SETUP. How could I even break my rules and long at $34.00? Well, I honestly did it because 34.00 was a good support area that I thought I could long at hoping the stock would not break through, now that is a good idea, but that idea is nothing without confirmation. There was no base to prove that this stock could potentially sit at 34 for a while, do a little drama and then shoot UP. I longed the stock and it went off the cliff and did some epic V shape formation as you can see. This was a shit play, I was lucky that I did not go in heavy on this and saved myself from a massive loss.

LULU

Lululemon is just nasty, look at the graph on the left first of all. This bad boy had a massive gap down, the gap down is so massive that LULU could not even fill it today it just broke down. Initially in the morning I anticipated LULU to fill a bit of the gap and I wanted to let LULU ride up and short around 65.00 - 65.50 price level, but it showed a lot of weakness and never really went that high, so I thought whatevez lets see what it can do once its under 63.00. So I grabbed the short at 62.99 because I wanted it to print below 63.00 to confirm the price is acceptable and it has some downside potential. Well overall it was a good play but did not end up making me any money. Crazy stock, play wasn't in my plan but I am happy did not lose any money either.

The importance of a Plan

I've been trading for a long time now, and honestly, to be a trader / day trader / investor all you need is a plan. We plan for a lot of stuff in life, we plan events, we take the right classes to get into college / university and trading is the same way. When making a trade, it is important to KNOW exactly what you want out of it. That's what the whole point of a plan is. During my last year of high school I planned to NOT take science courses because I knew I wanted nothing to do with sciences, so I apply the same idea to trading and tell my self: I will not take any trades that are not in my plan. Its SIMPLE, but very very hard at times to follow. This is the only way to move on from failing and making stupid mistakes.

Made 2 trades today, 1st one wasn't planned and the 2nd one was. Enjoy.

The EPIC FAIL Positive Trade

MW was a good catch, it was a fade play considering that it gapped into resistance and most likely it would go down at the open. I grabbed it without planning on what ima do with it. So the commentary explains for itself, the profit I made out of this explains for itself, at one point I was +$100 but I closed the trade and came out with only $17. Epic FAIL. If you look closely, you will see I made yellow rectangles all over the stock, those are my fail exits, I was taking profits at the wrong spots with the wrong amount of shares. 

The EPIC PASS Positive and Relaxing Trade

Now here we have CCL, check that out, see that writing? That is what I wrote down before the market opened, I knew exactly what I wanted or had somewhat of a clue of what I wanted and did what my plan told me. It did fail once, but I was confident that it was just a fake out so I re-entered again. And look what happened, I made money, I made relaxing money and I knew exactly what I was doing. 

Control and Avoiding Fake Plays

VLO - Good play, entry a bit late but on the right hand chart which is 5 minute candles, the entry happened really fast, it broke through 44 level in the same candle. (yellow highlighted candle) typically this is not the best way to enter a trade but in the morning I had written down the VLO would be a good short around 45, but the high it did was 44.55. My short entry was at 44.05 and it worked. My exited half my position first when I reached almost .50 cents below my entry which was around 43.65 and then watched it go down to 43.40 and then once it came back up to 43.60 area I exited the other half of the position. If I had waited for the pivot my exits would be somewhere around 43. 35 area.

COH - Again just like LVS, COH and I have a bad history. BUT, today I actually looked closer and thought about the trade before trading. COH looked very tempting, but with closer examination, COH had absolutely no set up. It looked like it did, it looked like it was going to go back up to 50, but NO! Like the bags COH makes the stock is UGLY and there are a lot of fakes. A reasonable setup would have been if the stock based at the lows for a while, but it did not, it came back really quick and this is a warning sign.

Boredom

Still I have no clue why I take plays when I am bored, this is what happens. This is probably the hardest part to control when it comes to trading. Do not force yourself to trade, stick to your plan. It is easy to say but a lot of discipline and practice to follow through. No such thing as easy money when it comes to trading, every play must be examined and understood. Prime example of what happens when none of that is done and again and again the more bored I get on days like today when there volume is low, no action, I tend to force a trade, then regret. 

Signs to get out

Examining the top left chart of an LVS short and also the types of candle action to watch out for during this type of play. First of all the Short taken on LVS was a breakdown play which is never a good play to take because it has high chances of failure as shown in the above example. I got lucky I broke even on this play because if I had not set up my exit strategy before the play I would have been in the play and lost load of $$ for no reason. First of all, don't take breakdowns, second this was a late play, third its LVS. This stock is the most dangerous stock, we go about 4 years back, I love the stock, I think its a great mover for intra-day trading, but for 4 years I have yet to still understand this stock. It moves crazy, it will fake a lot, it will do stuff that you've never seen a stock do. But I figured this fail breakdown with an unbelievable 110% re-tracement is normal for LVS. Just remember, if this ever happens, look to close your position right away or at break even, its not worth watching this move $1 against you.

Fail to Plan = Plan to Fail

Being patient on this play actually would have allowed me to avoid a BIG massive fail like this. Fell into the typical situation where my mind told me "this is going up" but the charts did not confirm that, so what did I do? I smacked down some shares and watched BIG, fail BIG! Well not fail BIG but this is the prime example of what not to do because the more you take plays without confirmation the more money you will give to the market.

Now AVAV, first of all I got a bad fill, second of all this stocks gap was wayyyyyyyyyyy to big. It made a massive run up from $17 and started chilling, but NO! ONE candle fakes out of everyone and there goes AVAV to make new highs. This is why it is important to avoid massive gaps, there is wayyy too much space between yesterdays close and todays open.

ONXX was a good trade, bad management. Trade 50 shares of this bad boy right in the beginning, at its high it was paying me $50 but I obviously wanted more. Stock was spready, very sketchy trade but it was the only positive of the day. 

Lets get back into this...for good

QCOM, markets were banging today, QQQ + SPY going crazy, longed QCOM at 68.03 of 150 shares and the stock was paying well, but it did not continue to go higher. Eventually had to kill the stock at about 67.90 area. 

Few other things to remember while day trading: Do Not Take Random Ass Trades. 99% of the time you will lose minimum of $10 on them because you have no idea where your exits are. Taking 1 random trade a day can cost up to $50 a week.