Week of 5/9/16

The market felt really slow this week, I got one trade in and pretty much just glanced at numerous stocks and grew older and (hopefully) more patient through each ticker move. Here’s the trade I made this week:

  • CCXI: $293

I went over this trade in the midweek recap. I’m still struggling with placing a trade once I establish a trend, I’m more comfortable pulling the trigger, but I still need to pull it as soon as I have identified a strong upward trend. The fact that I did lose money the previous week made it slightly harder to jump into the trade than usual, but it’s definitely not as hard as it used to be. So progress is being made and that aspect of trading is something that will get better with time.

May Midweek #2

Now that the “Massacre of Cinco de Mayo” is behind us, I have a very positive outlook for this week. Here are some stocks that have caught my eye:

  • SODA: Sodastream had a great 1Q 2016. They released their financial reports on Monday and the stock has been going up ever since. I feel like it might level out tomorrow, but I’ll definitely keep an eye on it.
  • CCXI: They announced that they will be hosting an R&D day on Wednesday, May 18th, 2016 at 12:00 PM EST in New York, NY this morning at 7:30AM EST. This may have been the catalyst for the upward trend that was on full display today, which I’m glad to say I took advantage of. The momentum could extend until tomorrow morning, so it wouldn’t hurt to check this stock out.
  • YRD: They just released their 1Q 2016 results, and they’re pretty impressive. Over the past year, their total net revenue increased by 187% and their net income increased by 355%. These are some amazing numbers that warrant a look at in tomorrow’s trading session.
  • M: Today was a rough day for Retailers, Macy’s slashed sales forecasts which ended up  bringing down the whole sector. It might bottom out tomorrow, so it could be worth a look.
  • CHK: This is usually one of my favorite stocks to watch, it seems to have a tendency to spike up randomly and if you’re lucky enough to catch it before it does, well you’ll be glad you had it under your radar. Looking at the chart right now, it might have a sudden spike in the morning, so I’ll definitely have it up on my screen.

As always, please remember that anything and everything can happen so trade accordingly.

 

Good judgment comes from experience. Experience comes from bad judgment.

Jim Horning

Week of 5/2/16

This week wasn’t as awesome as I would have wanted it to be, but that’s just how things are sometimes. In my mid week recap I talked about SYNC and how they had just closed a deal with AT&T, well I took the plunge and the stock decided to go against the tide and I lost about $467. Now, I feel like going into the trade, I knew it would be very risky and could turn either way, I could win big or lose big, knowing that fully made it extremely easy for me to be ok with the outcome of the trade. Being aware of your risk is absolutely crucial! If I had not made my peace prior to placing the trade, I might have taken the loss a little hard, but I’m honestly not bothered by it at all. Tomorrow is another day, and I intend to keep going regardless.  Quitting is not an option, it never will be. 

MACD

The MACD or  Moving Average Convergence Divergence is pretty widely used by technical traders because it allows you to identify short-term trends. I use it everyday and the times that things have gone south for me were usually because I failed to read the MACD indicator correctly. So let me start with the basics:

  • Moving Average:  The MACD uses exponential moving averages, which basically means that the latest data points are weighted more heavily. This allows you to have a better understanding of the current trends, without having the earlier data skew the calculation.
  • Convergence: this means to meet or come together. When dealing with technical analysis,  this means that the stock (future, index, whatever you’re looking at) is moving in the same direction the indicator is.
  • Divergence: this is the opposite of convergence, the indicator is going against the trend of the observed asset. Divergence is usually the occurrence that most traders are looking for because it indicates a change in the current trend. You want to take advantage of this trend change!

The MACD uses the Exponential Moving Averages (EMA) of 12, 26, and 9 days. In order to calculate the MACD, you subtract the 26 day EMA from the 12 day EMA, whenever these points meet, you plot them in the “zero” line that can be found in the middle.

 

Macd Example

The blue line is the 12 day EMA, the yellow/tan line is the 26 day EMA, the 9 day EMA are the red and green bars coming from the “zero” line.  When you have a strong upward trend, the 9 day EMA will be a much brighter green and when the opposite is true, the EMA will be a brighter shade of red.

Macd Example

The circled section indicates that the short term EMA has surpassed the long term EMA, which means that the momentum is signaling a change in upward momentum.

Macd Example

You can also see a spike in volume, which is very common as soon as the bell rings, accompanied by a strong “green EMA” indicator, a good sign that this stock will be trending upwards.

Screen Shot 2016-05-08 at 9.24.31 PM

Now that we’ve established that this stock has a relatively high chance of keeping the upward trend going (remember it takes one person to completely change this outlook, one big player can send this all to the crapper) I would wait until the MACD crosses over the “zero” line to buy it. Keep an eye on the volume, as well as the 9 day EMA once you hold the position.

Screen Shot 2016-05-08 at 9.24.31 PM

Now that we’re riding profit out, I normally would glance over the 9 day EMA and feel out the momentum of the price pattern and sell towards the top of the MACD signal. As you get closer to the top of the MACD, the 9 day EMA becomes a dimmer green, which indicates momentum is not as strong and could end up going the other way.  Now, you can be a badass and ride it out all the way to $2.38, but why take the risk? We don’t know how long the ride is going to last, so just take what you can before you crash.

I hope this helps! As always, please feel free to let me know what you think, feedback is welcomed and greatly appreciated 🙂

May is here

As promised, this will be my first mid week recap. What I’ll do is go over the stocks that I’ve been looking at so far, and if a trade was made or not. The goal is to get a feel of the market and figure out what stocks to look out for. So here’s a list of some significant movers these past couple of days:

  • SRPT: This stock was outstanding on Monday! and we can thank Oppenheimer for that, they raised the price target to $60 a share, upgrading the stock to “outperform”. Now I didn’t get a change to ride the bull train, instead I “chose” to work on my day gig.
  • PRGN: had a bounce early in the morning, definitely worth a look at tomorrow just to see if there’s more life to it. This move is due to the company denying bankruptcy rumors and filing a lawsuit against Tradewinds for defamation.
  • GNW: Great Q1 guidance lead to this stock being hot on Monday and spike up on Tuesday morning.
  • SYNC: Just closed a contract with AT&T and it shares skyrocketed, so definitely worth a look tomorrow.
  • LGCY: moved 14% afterwards after reporting Q1 results, not a bad stock to look over in the morning.

Pretty excited about trading tomorrow! 🙂

Slow and Steady

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May is basically here, which means, its almost time for summer, aka half the year is almost gone! Although I would love to reach the $25,000 goal in a month, I’ve learned that slow and steady wins the trading race. It takes one trade to completely wipe you out, just one, there’s very few professions in which one mistake can cost you everything (work related mistake, not scandalous behavior, that’s a whole different problem). With that being said, I will cautiously take my calculated risks and aim for the long run. After all, we all want to be successful traders, not just one hit wonders.

April 2016 recap

April has come and gone! It felt like a huge blur, and I let it get in the way of my blog. So here are the trades I made while I was away…

  • VSLR: $170.46
  • VKTX: -$160.54
  • DNR: -$61.60
  • RPRX: $360.88
  • PLG: $132.96
  • GNW: -$46

The great thing about this month is that with every loss, I did not become discouraged or upset. The bad thing is, I traded six times. Although I fantasize about quitting my job and solely focusing on trading, it is not the easiest thing to do when you’re on your own and have a ton of bills to pay (student debt really has a way of crushing your entrepreneurial spirit). So in order to tackle this problem, I have decided that instead of waiting until the end of the week (or the month this time FML), I will post a “Midweek Update”, which in turn will go over the stocks that I am currently looking at and the trades that have been made up to that point.

We’re almost halfway through the year! So let’s make some changes and reach our goals 🙂

Necessary Venting

If you are one of the few people that knows me closely, you know that I overthink and overanalyze everything, and I mean EVERYTHING. If something is not “how it should be”, I tend to focus on that specific something and try to figure out why it’s not how it should be and how I can get it to be the way it needs to be. This unfortunate characteristic (sometimes it feels more like a disease *sigh*) plagues various portions of my life, and lately it has seeped in to my trading routine. Like most of the annoying things we do that are unbeknownst to us, it is very difficult to stop doing these relatively automatic behaviors due to their habitual nature. This is like the turning point in a relationship where all the cute little things your significant other does that were endearing at first, are now utterly mind-numbing and you have to decide whether to stick it out or heave home. Once you realize your annoying natural reactions or behaviors, you can’t “heave home”, you gotta figure out how to deal with yourself and how to make these behaviors less common.

As fun as it is to evaluate yourself, it is extremely important to do so at various stages in your life. I figured out my unyielding thought process and its negative aspects when I was about nineteen, but I wasn’t mature enough then to handle it. Fast forward to now, 6 years later, and I am still struggling with myself, but to a lesser extent. Now, if you haven’t read my previous posts, I tend to blog more about behavior because I feel that most people underestimate how much it affects your ability to trade. You can learn all the technical aspects of trading, but if you can’t master your emotions or reactions, then it won’t do you much good. I feel like today I let my thought process be overwhelmed by fear and doubt, which in turn led me down a very familiar path of overthinking and overanalyzing. So I placed a trade, and surprisingly enough (NOT) it didn’t go very well. As disappointed as I was, I was also relieved because I knew what the problem was and that being harsh with myself would only make the situation worse. I have a long way to go in handling my annoying/automatic overthinking, but I’m getting closer to being the person I “need” to be and I enjoy the pace and path I’m taking to get there.

P.S. Those annoying little things your significant other does…well love makes those things extremely hard to do without.

Week of 3/28/16

I have to admit I’ve been MIA for a while, sometimes the hustle gets derailed, but as long as it keeps going, we’re good 🙂

Here are the trades I made this last week:

  • LEU: -$15.44
  • GBSN: $280.49
    • I should have held this out a little longer, but the fact that I can’t monitor the trades through out the day as constantly as I wish I could stopped me.
  • GNCA: $56
    • Another huge one this past week, wish I would have used my bigger account for this trade, but I will take the profits with a smile.

Definitely a great week and end to the first quarter of the year!