Here is how my GROW trade turned out:
As pointed out by SimplyOptions, I bought GROW before the break of the OR high, which I admit was higher risk (because it could and often does, just reverse at the level of the OR high). The reason that I did that was because I noticed that the volume started to pick up, and the bid was starting to move up as well. Compare this with a lower risk entry (copied from the Dec 04/06 edition of the HighChartPattern newsletter, with their permission of course):
My purchase was one of those candlesticks before the break above the yellow line (@51.31). Yes, it would have been lower risk to wait for the break above 51.5, and yes, it would have been better to be just a little bit more patient, but I'm not going to beat myself up over that.
I will say, though that I clearly did not have an exit strategy with GROW, and I'd much rather beat myself up over this instead - LOL!
I sold today @57.53 but again, I had the bad habit of watching just the ticker instead of trading the chart. Had I been watching the chart instead , and pasting up a moving avg line (2 clicks of the mouse on the IB TWS), I could have easily and realistically extracted another $1.40 from this trade (the MA would indicate a sell just below $59). An extra $1.40 of profit was left on the table - that sucks !!
Trade the Chart and not the Ticker !!
Tuesday, December 05, 2006
Deconstructing my GROW trade
Wi-Lan update
I posted about my Wi-Lan trade yesterday. Here is how it turned out (1d/5min chart):
Although exiting and then re-entering back into the same stock in the same day could be considered a screwup, I did feel that this one was tough to hold onto as the morning session wore on. As usual, volume dried up as the morning wore on.
What I did go back to doing was trading the chart. Because I have been watching the ticker more and more, I started "forgetting" to do that in the past few days, and now that I'm back into doing it (looking at my position from a 5/15min. chart), boy does it make a difference ! Right away, I could see where I should exit my new position in WIN, and where a possible re-entry would be.
Lesson of the day:
Trade the chart, not the profit.
Trade the chart, not the ticker.
Monday, December 04, 2006
Today's results
I made 4 option trades and 1 stock trade today. The one stock trade was a re-entry of GROW:
In retrospect, I should have picked up GROW in my retirement account and just let it ride. Oh well, at least I have made a couple of decent trades off this latest momo run in GROW.
I also made 4 option purchases today, one of which I already talked about here. The other 3 option purchases were: BIDU, ATI, and GOOG. Hopefully, I will have time to post charts on those trades once I close them.
So even discounting my big win in the Wi-Lan trade (which closed today @4.4, whoo-Hoo!), and my screw up of the AKAM call option trade (luckily it was a small position), all in all, it was still a good day.
To keep things simple, I will be posting just my PnL and #OptionTrades and #StockTrades to the performance spreadsheet (see link to the right).
AKAM
For me, it seems AKAM's real ticker is "DONTCHASEMEYOUDUMA$$".
There was a bit of front-running, hoping and predicting in this one, even though that was what I planned to do. I did trade according to the plan, and yes, the plan is flawed.
U-Turn Reversal
This is one of the best examples of TraderX's U-Turn reversal pattern that I have personally seen to date (I don't get to see too many of them happen in real-time !).
The stock is PNP, and unfortunately for the American traders, it trades only on the TSX. I picked up some for my retirement account.
Wi-Lan
I found out about half an hour ago that Nokia decided to license Wi-Lan's patents (click on title for the news release). I bought some Wi-Lan @2.57 (but obviously not enough), so this win definitely feels very good. 
Yes, I realize I got a bit lucky here, but as the saying goes - Fortune favours the bold !!
Two Sessions in One
Trader ZBS wrote about splitting the trading session into two separate parts - the morning session and the afternoon session. By looking at the usual momo stocks today (AAPL, AKAM, RIMM, GOOG, BIDU, etc.) and one can make a good argument as to why it might be a good idea to treat it as two separate sessions. Today's pullbacks started a little early (around 1120AM), but it would be much easier to play these stocks if they were treated as going through two separate sessions. I've seen this happen more than once, so I know that it is not some random coincidence that stocks pullback at around noon time.
The alternative would be to find stocks that do not follow the trend of the tech stocks. These would include the gold stocks (like KRY, AUY, etc.) and the uranium stocks (EMU, FRG, URME). Others include biotech, but I find biotech stocks even more risky than tech stocks (they live and die by the roll of the FDA dice).
Yet another alternative would be to, during the trading session, somehow be able to switch from the breakout trading mindset, to the pullback trading mindset (ie. look for a successful test of support instead of looking for the break above resistance). I haven't yet figured out a way to do this, but it's an idea that I will be working on as well.
Sunday, December 03, 2006
My biggest Trading Weakness
I've started once again thinking about my trading habits and mistakes that I've been making. I think that the majority of the mistakes that I have been making can ultimately be traced back to the one weakness that I have - a lack of patience. There isn't too much more that needs to be elaborated about this problem of mine. Much of this issue is already sprinkled throughout this trading journal.
I'm actually genuinely optimistic that I will overcome this problem, but realistic enough to understand that my lack of patience has been a well entrenched habit embedded over the many years of life experience.
I am a believer of the notion that working to improve one area of your life has positive spillover effects into other areas of your life. For example, by practicing the habit of sleeping earlier and waking up earlier, goals for the day become easier to achieve - because you've already achieved at least one goal of waking up earlier. Similarly, by practicing the habit of jogging at least once every other day, the improvement in physical health tends to improve your mental capacity as well.
One thing that I've noticed with many young children (such as my own daughter) is that it is relatively easy for them to learn how a new toy works. They are motivated to learn, and their persistence in learning is rewarded with some instant gratification and pleasure derived from being able to play with the new toy. And yet at the same time, it is equally hard for them to learn the habit of picking up their toys and putting it away when they are finished. And now that I have the time, I plan to attack my one biggest trading weakness by practicing patience with my daughter - like being patient enough to instill some sense of responsibility in my daughter by actually going through the exercise of working with her to help her pick up her toys after she's done playing with them. Though this may seem trivial and insignificant, it is from winning the little battles that eventually pave the path to victory in the war.
OT: Work Update
However, it also stated that I would be paid thru Dec 1/06 ".... for services rendered." My (former) boss was saying that this means my last day was supposed to be Dec 1/06, but nowhere does the layoff notice state explicitly what my last day was. Anyways, to make a long story short, my former boss phoned and emailed me asking me to come in to work, and I wound up going in for work for 3 hours on Friday, as a compromise. Just in case there are any of readers out there who are in a position to layoff employees, please, PLEASE state the last day of work in the layoff notice !!! In fact, just contact me, and I will make some good suggestions to you on how to layoff someone (as my experience was a very good example of how NOT to layoff an employee).
At the same time, on Friday, I had a job interview (which was the other reason why I only worked 3 hours at my former company). Over the years, I have learned to use job interviews not only as an opportunity to showcase my knowledge and skills to my potential employer, but also to learn more about, and evaluate the work environment, in which I would be working, and the poeple with whom I would be working, should I get the job offer. At this company, the first thing I noticed when I stepped into their office was how small it was. I would describe the physical work environment as a compressed cube farm! The cubicles were literally big enough to contain a chair, table, and PC, and that was it. Seriously, if you were overweight, you would find it difficult to squeeze into such a small cubicle.
The next thing I noticed was that the majority of the people who interviewed me had a very poor command of the English language, as indicated by their heavy accents and broken English. And they proceeded to give me a C++ test, when nowhere in my resume did I indicate that I was an expert in C++ !
So, I could already imagine a typical day working there. First I would go into that compressed fishbowl of an office, and make my way to the cubbyhole that they interpret as my cubicle. Then I would spend the majority of the day figuring out how to use very, very basic English to explain to these employees how they misinterpreted my words. This would be on top of trying to learn C++ completely on my own (since I would not understand the employees explanations of how their programs work).
Given all of the above, it becomes easy to come to the conclusion that this is not be best environment where I could thrive and show my best. I am actually hoping that they do not offer me a job, because then there is no potential dilemma to resolve.
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