A Brief Look Into My Trading Mentality and Strategy

Sep 30, 2007 -

- 2 comments

Personally, I’d rather hold two long term trades making 50% profit at the end of the year than scalping thirty trades throughout the year and making the same profit at the end of the year. Don’t get me wrong, both result in positive gains and in either result most people would call it a great year.

But, there will be some days when I don’t have access to a laptop or computer during market hours (at least until I get my laptop in the mail). If I start trading shorter time frames, I’ll end up missing an entry or maybe making a decent exit. But I also understand that not every trade can withstand two months+ of market volatility. There are many stocks that rally for a month and then spiral out of control. In that sense, I won’t be just buying it and then forgetting about it for a year or two.

My goal is to ride the stocks that have been going up consistently for at least three months and to use either a 20 or 50 day moving average as a trailing stop. If the trend breaks then I’ll take my position out of the market and move on.

Aside from the previously mentioned, as many of you know, there are opportunities to make money in the short run also. If I see a trade that looks like it will be going up in the short term (a couple of days to 2 months) with low risk (risk is determined by the stop ), I will initiate a position. In order for me to be successful with this strategy, I will have to know that I will have access to a computer during the period in which I will have to monitor the stock closely. I don’t like setting actual stops with my broker because there will be times when the stop is briefly hit, but at the end of the day the stock finishes up for the day.

This short term strategy will enable me to more readily adapt to market conditions. Also trading in the short term will give me a better idea and the feel for current markets situations. To keep this strategy separate from the other strategy, I will keep a journal recording the approaches to particular trades.

I've hit somewhat of a rut in terms of improving my trading, maybe you guys can give me insight as to how you guys continue to improve your trading either mentally or technically speaking.

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Thursday Links

Sep 27, 2007 -

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Wednesday, September 26th 2007

Sep 26, 2007 -

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I began my internship today at an investment banking firm. That's the reason for my absence this morning and much of this afternoon. First, I would like to apologize for the late post. Seeing how the Fall quarter is beginning tomorrow, I will be spending much of my time at school. However, I will continue to trade stocks as I have been doing for quite some time now.

As I get more and more into the internship, I will post my experiences here. Hopefully everything goes well and this will be a challenging school year juggling everything at once.

For tomorrow, I will be looking to see if the trend continues for WYNN and CPHD. Lately, I have been very cautious and selective with my stocks. Basically, calming down and going with the basics.

I will be screening my list to see if there are any general setups I can take tomorrow, but I get a feeling that I may be disappointed.

Two stocks to look at tommorrow: LIFC (low risk) & CVGW (Still looking to see if it can break resist)
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Profit Taking Wednesday, September 25th 2007

Sep 25, 2007 -

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Looks like people were taking profits throughout the day. Nonetheless, the markets finished up. I will be out most of the day tomorrow, so most likely I will not be trading tomorrow.

On a different note, I purchased a Vostro 1400 (Dell Laptop) for around $700. I will be using this when I am not a home trading stocks. It's light enough for me to carry around and good enough for me to perform basic activities such as Word, PowerPoint, and Excel. It should be able to run Photoshop without any problems.

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Stock Picks For Monday, September 24th 2007

Sep 24, 2007 -

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I've developed a watch list, but under my strategy their haven't shown any buy signals. It is disheartening to see stocks like GRMN go up 4 points almost everyday. But, I must not chase. I've been burned before and it was a costly lesson. I will wait till my buy signals show up.

Stock I am looking at today: CPHD

Good luck this week!

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War (2007) Starring Jet Li & Jason Statham

Sep 23, 2007 -

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"After his partner Tom Wynne (Terry Chen) and family are killed apparently by the infamous and elusive assassin Rogue (Jet Li), FBI agent Jack Crawford (Jason Statham) becomes obsessed with revenge as his world unravels into a vortex of guilt and betrayal. Rogue eventually resurfaces to settle a score of his own, setting off a bloody crime war between Asian mob rivals Chang (John Lone) of the Triad's and Yakuza boss Shiro (Ryo Ishibashi). When Jack and Rogue finally come face to face, the ultimate truth of their pasts will be revealed."
Written by CartmanKun@aol.com


I had the opportunity to watch War yesterday. I was impressed with the story line and the action scenes helped keep me attentive.



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Stock Trading Lessons Thus Far + Links for Saturday, September 22nd 2007

Sep 22, 2007 -

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"I had been completely correct in my thinking, but I was too impatient. I tried to cheat the pattern by getting in early and instead the market taught me a valuable lesson: you can't cheat the market so wait for the market to tell you how to act"

"The key was simply waiting for the right opportunities to present themselves"

"It was definitely better to get out early than to be unable to get out after a large price drop"

"You cannont rely on speculation for steady earnings because the game doesn't work that way. Opportunities come and go. The key is to remain nimble enough to be able to take advantage of situations when they arise."

10 Documentaries you must watch on Google Video

This looks like an awesome desk, but would you stand up the entire day?

Coca-Cola Self Chilling Soft Drinks

Tell me this isn't cool.....
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Market Review and Thoughts for Friday, September 21th 2007

Sep 20, 2007 -

- 2 comments
Like Kirk mentioned, The market is looking overbought for the most part. Today's pullback might have looked nice if it was a much larger move. Nonetheless, I do see two potential buys for tomorrow. DVR and HIFN. HIFN looks like a much better buy, especially as its hovering over the 20 day MA.

Anyways, I exited my position on VRSN for a 1.8% gain. I held it for two days. Looking back my entry was late and its overbought now such is the market.
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Federal Reserve News For Tuesday, September 18th 2007

Sep 18, 2007 -

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Fed cuts rates by a half percentage point
"The Federal Reserve unanimously cut its overnight interest rate by a half percentage point to 4.75% Tuesday, citing turmoil in financial markets as a threat to economic growth."

The FOMC signaled that further rate cuts could be coming, saying it would monitor the situation and that it stood ready act if necessary.

This is the first cut in the federal funds target rate since June 2003. The funds rate is at its lowest level since May 2006."
As as a result the Dow is up 250 points, Nasdaq up 57, S&P 500 up 34 points.

Source news
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BLOG RUSH is the New Way to Increase Traffic to Your Website

Sep 16, 2007 -

- 2 comments


Every blogger or person with a website is always looking to increase traffic. Nowadays there are so many widgets and marketing tools such as Technorati. Unlike other marketing tools, Blog Rush seems to be more appealing. It was just released John Reese, supposedly the king of internet marketing, on a new site called Blog Rush.

Here is how it works:

Sign up for a free account, enter some information about your blog, select a category of your blog, and add a RSS URL, and then copy and paste the widget html.

When the widget loads there will be five different blog links. These blog links come from users like yourself. It's a excellent way of utilizing viral marketing.

How does this widget bring you traffic?

You blog link will be displayed on the widget. The number of times your blog url is shown is based on how many views your blog gets. Lets say that your blog gets 1000 views per day. That means your blog will be viewed 1000 times on other blogs who also have the BlogRush widget. If you refer another blog to the network and they do 1000 page views per day, you’ll get your shown another 1000 times. This goes down for ten generations.

Basically, your link gets shown everywhere!

Here is a video that explains this further:


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Kirk Report's Seven Accumulated Stock Trading Rules

Sep 13, 2007 -

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1. Be on the correct side of the supply and demand forces at work.
2. Never upset the trading Gods by talking up your book. Hubris kills.
3. Risk must be embraced, not feared.
4. Reversals are always more lucrative than trends.
5. Cycles tend to change before you can take advantage of them.
6. Wishful thinking and emotional trading are a loser's game.
7. Never fall in love with a winning stock.

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BMW X6, ActiveHybrid Concepts

Sep 12, 2007 -

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Fortune & Business 2.0

Sep 11, 2007 -

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I guess Zecco is doing some kind of promotion or giving their customers digital magazines. These just appeared in my email today, I went through Fortune and it seems like a good magazine. They pretty much are more for enjoyment than anything. I take very little out of these magazines. But, occasionally they'll have a good article or two. Either way they give you insight on how rich people live. Anyways, Let me know what you guys think. I thought you might like to check them out, too:



Business 2.0:
http://mag1.olivesoftware.com/ActiveMagazine/welcome/BSN/Zecco/
Fortune:
http://mag1.olivesoftware.com/ActiveMagazine/welcome/Time/Fortune/Zecco/

Have fun reading!
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Four Stages in a Complete Stock Trade

Sep 10, 2007 -

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I can think of four stages to divide a complete trade into.

1) Screening the list of potential stocks

There thousands or millions of stocks to choose from various markets. Which ones you filter out depend on what kinds of stocks you are looking for. Are you looking into a specific industry? Or maybe a particular technical trend that has been doing well for you. Some stocks are good for shorting others are not. Screening a list of stocks helps narrow down the playing field.

2) Entering the trade

If you get into a stock at $10.00 and it goes up to $11.00 versus getting in at $9.00, it makes a difference. Getting in at $9.00 per share makes you two dollars more profit per share. The right entry and the right timing can get you a cheap price for a stock. If you randomly enter the stock, your short term results ends up looking like a gamble.

3) Managing the trade

You need to know when you are going to exit a trade or scale in/ scale out. Scaling in means adding shares into your position because you believe the stock will go up. Scaling out means you are selling shares little by little, but not all at once. When you are in a position you need to monitor your trade in the event that it plummets or sky rockets. Personally, I don't like putting physical stops because a stock can fluctuate all over the place during the day. But at the end of the day the stock may end up higher than it opened. I am usually a weekly to monthly time frame trader, so the previously mentioned makes sense to me. Because I don't put physical stops, its crucial that I monitor it constantly to initial any of my mental stops.

4) Exiting the trade

This is where you make your money. When you exit a trade it closes the deal. You could have picked the right stock, entered corrected, and managed your trade well, but at the end of the day if you sell your shares at a loss you lose money. Where you exit is more important then where you enter per say. What I should say is the difference between where you exit and enter is most important. That is where you make your profit or take a loss. Exiting a trade goes hand in hand with managing a trade because when you manage a trade you are looking for a signal to exit or to continue to hold.

These steps take discipline and a lot of traders let their emotions get the best of them and they hold through situations they otherwise wouldn't have held had they not had such strong emotional attachments or greed.
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SHANGHAI KISS

Sep 9, 2007 -

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There is something irresistible about Shanghai Kiss. The story is humorous, romantic, and thought-provoking at many different levels. A young Asian-American in search of his identity, played by Ken Leung, befriends a precocious teenager, played by Hayden Panettiere. Ken gave a brilliant performance as the witty, sensitive, and endearing young man. He was so natural that at no point did I doubt that he was that character. Hayden simply lights up the screen. Her eyes sparkle, and when she smiles, it just melts the audience's heart. As the story continues, Ken inherits a house in Shanghai, and meets a woman played by the lovely Kelly Hu. There are other relationships interwoven into the story, such as Ken's troubled relationship with his father, and his friendship with his straight-shooter nerdy buddy played superbly by Joel David Moore. I can barely do justice in describing how interesting the storyline is and how clever and humorous the dialogs are. But one thing I can say is that you would not be able to resist thinking about this film for days afterwards.

Excerpt taken from: http://www.imdb.com/title/tt0469184/
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Exits

Sep 8, 2007 -

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Exits determine your profits and losses.

I was looking through a couple of my past trades to see what I could improve on. My entries were good (almost 70% of all my trades go up sometime during my trade). But, my exits showed losses.

I am guessing that I let my gains turn into losses because sometimes I try to hold out for more profit. I went back to reread some of my trade books, more specifically Trade Your Way to Financial Freedom. I focused more on the exits portion of the book of course. Right now, I'm looking to exit my trades if my profits retrace more than 25% (i.e. 25% + 0.01).
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AVENUE Q in LA

Sep 7, 2007 -

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I watched Avenue Q Thursday after work! In essence its a musical Broadway adult version of sesame street.I definitely enjoyed it! =]




"THE MOST FUN ONSTAGE THIS YEAR!"
- The New Yorker

What is AVENUE Q about?

AVENUE Q is the story of Princeton, a bright-eyed college grad who comes to New York City with big dreams and a tiny bank account. He soon discovers that the only neighborhood in his price range is Avenue Q; still, the neighbors seem nice. There's Brian the out-of-work comedian and his therapist fianceƩ Christmas Eve; Nicky the good-hearted slacker and his roommate Rod -- a Republican investment banker who seems to have some sort of secret; an Internet addict called Trekkie Monster; and a very cute kindergarten teaching assistant named Kate. And would you believe the building's superintendent is Gary Coleman?!? (Yes, that Gary Coleman.) Together, Princeton and his newfound friends struggle to find jobs, dates, and their ever-elusive purpose in life.


Who is AVENUE Q appropriate for?

Adults love AVENUE Q, but they seem a little, er, fuzzy on whether it's appropriate for kids. We'll try to clear that up. AVENUE Q is great for teenagers because it's about real life. It may not be appropriate for young children because AVENUE Q addresses issues like sex, drinking, and surfing the web for porn. It's hard to say what exact age is right to see AVENUE Q - parents should use their discretion based on the maturity level of their children. But we promise you this - if you DO bring your teenagers to AVENUE Q, they'll think you're really cool.



http://www.avenueq.com/about.html


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September 5th Trading

Sep 5, 2007 -

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Portfolio Holding: CRNT & EMKR (70 Stocks / 30 %Cash)

Both are up 5-10% from where I bought it at.

I try not to look at my account or the profit level because then my emotions come into play. What I do look at are the charts and I read what the charts tell me. This way I trade my ideas and thoughts about the market rather than my emotions about how much money I have in the trade. There have been too many times when I've sold a stock because it was down only to see it rebound to a new high.

EMKR looks like it will hit resistance at $10. We shall see if it can overcome that barrier later today or tommorrow.

As long as the charts look good, I will continue to hold/add to the trades.

Happy Trading!
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Links

Sep 4, 2007 -

Vanishing American Vacation

Don talks about how Americans are working longer and harder than most other countries. This means we should be more productive than other developed nations right? Wrong. Europeans take longer vacations and yet they are more productive.

24 Tips to Becoming an Early Riser

Wake up earlier. Get more done. How do you wake up earlier? 24 tips above to become an early riser.

Defining Success: If you don't know what you want, you won't know when you've gotten it.

Make sure you are going in the right direction. If you don't, you might realize what you thought you wanted isn't what you really want. Figure out what you want from life and then go get it. You only have one life.

Tapping or knowing where to tap?

Most of the time persistence or sheer strength can only get you so far. Sometimes it isn't how many times you do it, it's how you do it.

Leadership: Control vs. Influence


What I've learned most from this summer is taking the initiative. If you want something you have to take the first step. Things don't come easy and nobody except you have to take the initiative.
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What's at the Heart of Happiness?

Sep 3, 2007 -

Wall Street Journal's article on What's at the Heart of Happiness. I thought this would be an interesting read. Enjoy.
No happiness isn't a lottery ticket away.
I am fascinated by academic studies of human happiness, because they bring scientific rigor to issues we all grapple with. We think more money will make us happier and yet studies suggest Americans are no more satisfied than they were three decades ago, when the standard of living was much lower.
So if winning the lottery won't do the trick, what will? Here are seven key lessons from happiness research. It is indeed possible to boost our happiness -- but it'll take more than a fat wallet.
1 What matters is what we focus on.
Those with higher incomes aren't necessarily happier. But when asked how satisfied they are with their lives, high earners are more likely to say they're happy.
Why? The question makes them ponder their position in society -- and they realize they're pretty lucky. The implication: If you have a hefty portfolio or hefty paycheck, you can probably bolster your happiness by regularly contemplating your good fortune.
Meanwhile, if you are less well off, avoid situations where you feel deprived -- and seek out those where comparisons are in your favor. Rather than buying the cheapest house in a wealthy neighborhood, settle for a town where people have similar salaries. When you think about your net worth, forget your well-heeled sister and focus on your cash-strapped brother.
2 Don't go it alone.
Studies have found that married folks are happier than those who are single.
"Marriage provides two sources of happiness," says Andrew Oswald, an economics professor at England's Warwick University. "One is sex and the other is friendship. Marriage has one of the largest impacts on human well-being."
Similarly, spending time with friends can boost happiness. Studies indicate that commuting is one of life's least enjoyable activities, that looking after the kids is more of a struggle than we like to admit and that eating is one of life's great pleasures.
But all of these things can be enhanced by adding friends. Commuting with others will make the trip less grim, playing with the kids will be more fun if there's another adult along and eating with others is better than eating alone.
3 We like to feel secure.
Midlife is a period of relative unhappiness. This dissatisfaction may stem from the lack of control felt by those in their 40s, as they juggle raising children and the demands of work.
By contrast, employees in senior positions, retirees and those with good job security often report being happy. One explanation: They have greater control over their daily lives.
"There's a profound link between insecurities of all kinds and human well-being," Prof. Oswald notes. "Supervisors are happier than those who are supervised. Job loss is an enormous negative and job security is an enormous plus to mental health."
4 We enjoy making progress.
Studies suggest we prefer leisure to work. But that doesn't mean work is always a source of unhappiness. We like the feeling of performing a job competently and being in the flow of work.
"There are definitely better and worse jobs," says David Schkade, a management professor at the University of California at San Diego. "If you're in the flow more often, that's going to be a better job."
But Prof. Schkade says work's real pleasure may come from the sense of accomplishment we feel afterward. "We know progress makes people feel good," he says. "You should design a life where you have that feeling of progress."
Work also has the benefit of making leisure seem sweeter, Prof. Schkade adds. This may be the reason seniors who set out solely to relax and have fun are often disappointed by their retirement.
5 We adapt to improvements.
In pursuit of progress, we strive for faster cars, fatter paychecks and winning lottery tickets.
Yet, when we get what we hanker after, we quickly become dissatisfied and soon we're lusting after something else. Academics refer to this as the "hedonic treadmill" or "hedonic adaptation."
We may, however, be able to slow the process of adaptation. If we go out and celebrate our recent promotion, we will hang onto the good feelings for a little longer. If we bought a house last year, we may recover some of the initial thrill by pausing to admire our new home.
We should also think about how we spend our money. It seems we get more lasting happiness from experiences than goods.
If we buy a new car, it will eventually go from being our pride and joy to being a scruffy set of wheels with an irritating rattle. But if we spend our money on meals with friends or vacations with family, we will be left with fond memories that may grow even fonder with time.
6 We also adapt to setbacks.
While adaptation can work against us when good things happen, it saves us from misery when bad times strike. If a close friend dies, we imagine we will never laugh again. But adaptation rides to the rescue.
Oddly enough, it seems we adjust more quickly if a setback is large or irreversible. If we become disabled, we will likely adapt with surprising speed. If our spouse is a slob, we may never get used to it.
One reason: We figure there's still a chance our spouse will change his or her slovenly ways.
7 We enjoy behaving virtuously.
If we volunteer, give to charity or behave politely, we usually feel pretty good.
Pure altruism? It may, instead, be our ancient instincts kicking in. Good behavior paid big dividends in ancient societies, notes Boston money manager Terry Burnham, co-author of "Mean Genes."
"Virtue is built into us because virtue was rewarded," he argues. "In small-scale societies, where you are well known, there are rewards for being a good citizen and severe punishments for being a rule breaker."
Still, whatever our true motivation, behaving virtuously is almost always a good thing -- and it will likely make us happier.

http://online.wsj.com/article/SB118808420276108999-email.html
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Determining Position Sizes

Sep 1, 2007 -

- 0 comments
There are a couple of ways to determine how many shares to buy of a certain stock.

1) Always pick a set or arbitrary number of shares.
2) Let your stop determine how many shares you buy.

The second option allows you to control how much money you are risking in any one trade more closely.

If you set a stop first, then you will know when to get out. Based on that stop, you can determine how many shares you want to buy.

If your stop is $.0250, in a $10k portfolio, we are looking at a 400 share position. This means you are risking $100. $100/ $10k is 1% risk.

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