The Trader Talk Think Tank

Announcing an unprecedented opportunity to learn…

We are visiting Chicago and Philadelphia!

Keystone Trading Concepts presents the

Trader Talk Think Tank

Each month in our NYC office Keystone Trading hosts and moderates a two hour networking event that empowers our attendees to:

· Discover how to assess market conditions like a professional for the upcoming quarter

· Gain insight into which sectors have the lowest risk opportunities

· Discuss ideas you have previously traded and new ideas you are considering

· Review of previous Game Plans and how Keystone’s proprietary traders and students executed those ideas with real money

· Get a glimpse into the Keystone Trading Plan and how we plan to attack the markets in the coming week

Additional topics on the schedule include:

· The most common and (most costly) stock trading mistake and how to avoid it

· How to eliminate the anxiety caused by reading your brokerage statement

· The difference between a risk only trade versus a trade with a high probability to earn money

· How to qualify to trade firm capital for Keystone (remotely)

On Wednesday October 27th at 7:00pm EDT Keystone Trading Concepts will be hosting a preview webinar for the next Trader Talk Think Tank to be held in Chicago at the Sofitel hotel on Monday, November 8th 2010.

During the Preview Webinar we will be discussing the top 5 reasons why attending the Chicago

Trader Talk Think Tank on November 8th will stimulate new ideas for you, learn how a professional trading firm allocates capital to scenarios and most likely develop some great new friendships.

Think Tank attendance has no fee with pre-registration however we normally have standing room only so there is a $75 fee at the door for those without an entrance ticket.

We strongly encourage registering with a friend or spouse!

Once again the preview webinar for the Chicago Think Tank is this Wednesday , October 27th at 7:00pm EDT, (6pm in Chicago) .

Please call 212-594-8900 to Reserve your spot Today!

Game Plan 9/8/2010

Just a quick post before the open today.  Commodity stocks were in play yesterday and look to be continuing with their strength on the open today.  I am specifically looking at US Steel (X), Freeport-McMoran (FCX) and Mosaic(MOS) today on the open.  All three are up in the pre-market and approaching important intraday breakout levels. 

X was very strong all day yesterday and is up about .50 in the pre-market and currently trading around 48.70 which happens to be yesterdays high.  If we clear that level the next resistance I see is the 200ma on the daily at 50.85 and then 51.40.  If we clear those levels 58 is the next reistance I see. 

FCX is currently trading around yesterdays high of 78.80 in the pre-market.  The level to watch is 79 which is basically the 2-day highs.  The next level to watch for resistance after that is 81.66 and then 82.20.  Longer term profit target above these levels is 88.30. 

MOS has basically been in a consolidation box for the past 15-days.  The levels to watch are 60 and 55.  Currently we are trading around 59 so I don’t think we are going to get to 60 today but I may put a piece on if I see some strength on the open with the intension of adding on above 60 for a profit target of 65.00. 

Best of luck today. 

Kyle

Making an Appointment

As I have discussed numerous times on this blog planning is one of if not the most important thing in trading.  You must plan out what you are going to do in every single scenario, so as to not hesitate if and when a trading opportunity presents itself.  Sometimes these plans take a little more time to develop so you must set alerts and be ready at all times like today in Hewlett-Packard (HPQ). 

HPQ has been weak on the charts ever since their CEO got himself in a little bit of trouble and resigned.  This downmove has been met with a lot of volume as funds have been liquidating their positions based on the uncertainty this company now faces.  On Tuesday I was looking to get involved in this stock if it continued to show weakness on the tape.  The levels we were watching were 42.40, 42.30, and 41.94.  I got short a few times on Tuesday anticipating a break only to watch the stock basically trade flat save for the last 5 minutes of the day. 

This last 5 minutes of the day was so important because it basically told the story of what to expect coming into today.  We traded through the first two levels I was watching like they were nothing and with increased volume.  Also we closed below these levels so I had a good idea that HPQ would be in play today on the open.  If you weren’t paying much attention to HPQ on the close Tuesday you probably weren’t ready for it today.  We opened down today and basically broke the flash crash lows of 41.94 in the first 10 minutes and trended lower for the entire day. 

This was a very simple trade as long as you were ready for it today.  The setup is one that everybody can understand.  A stock sells off, consolidates, then makes another leg down.  The key was to not get frustrated the previous day and keep this stock on your radar.  Put your alerts in at the price you need to see the stock trade at, then when it breaks get involved.  Have a good night and best of luck tomorrow. 

Kyle

Trade Recap

Just sitting here running through some of my trades from the past week and thought I would share my thought process on one particular trade I was involved in from this past Friday. 

The stock I was involved in was Research in Motion(RIMM).  My thought process going into the day was this stock was a long only.  There was fresh news from the previous day about the upcoming release of a new touch screen blackberry that would be a direct competitor to the Apple(AAPL) iPhone.  Also RIMM on the previous day had shown very good relative strength to the market by not selling off, then when the market turned around RIMM rallied over 2 points.  The levels I was watching Friday was 54 which was very strong support and the 56 level as resistance which it had failed to close above.  I wanted to get long around the 54 level or find an intraday level where the buying was strong.  If RIMM got above the 56 level early in the day I could easily see it filling the gap to the 58 level. 

On the open I got exactly what I wanted as RIMM started to selloff and approach the 54 level.  I put a bid out there waiting for the price I wanted.  Buyers stepped in early, around 54.30, and RIMM started to consolidate at 54.50.  When the 9:55am number hit RIMM took off.  I didn’t hit the offer as I was patient knowing that RIMM would give me an entry.  I got that entry at 55.25 knowing that I would be out before 55 was broken.  I added into the trade once I got confirmation that there was real buying in this stock and bids were being supported.  I scaled out some at 55.90 as RIMM started to consolidate around the important 56 level I had identified coming into the day. 

One mistake I made was not taking this opportunity to put on some serious size.  I knew what the level was and the stock kept testing it.  At 11am when the range got to a very manageable .20 I should have loaded the boat and even mentioned it to my deskmate Chad.  I ended up adding some shares on the break but it was irresponsible not to load the boat as this was the opportunity I was waiting all day for.  I had planned for this early break of 56 and made a mistake not putting enough size on this trade.  In all honesty I didn’t follow my plan.  I ended up riding the rest of this trade till RIMM got above 57 and took the last piece off at 57.15.  This was another mistake on my part as my profit target was 58 and I shouldn’t have been so quick to give up on the last part of this move. 

Now don’t get me wrong getting 2 points on a trade, especially before the weekend, was very nice.  I planned this trade out well going into the day, and found some very nice entries by reading the order flow on Level 2.  But I still made mistakes on this trade.  I believe one of the most important things we can do as traders is to eliminate as many mistakes as we can.  This was a nice trade but I could have done so many things differently to make this trade better.  This was a trade that made sense to me, with patterns that made sense to me.  Now I can’t go back in time so what I am going to do is keep replaying this trade so when a situation like this trade presents itself again I will take better advantage of it.  I will go through my journal and take note of what I wrote going into the day.  I will write down details of the trade as it was unfolding.  I will also write down what I did right and wrong.  I will also watch the trade again using tick replay and take note of how I could have capitalized better on the price action. 

As traders it is very easy to beat ourselves up on our bad days.  What we need to do is reinforce our good days.  The good trades are the ones that need to be studied.  These are the trades where things came together and made sense.  These are the trades that you want to repeat.  Hope you all have a good weekend. 

Kyle

Everyday isn’t the Same

As Mario posted earlier today, what a boring day to trade.  Sure there were some pockets of opportunity in Newmont (NEM),  Research in Motion(RIMM), and the gold sector to name a few.  But I think today taken in the context of yesterday was a great educational experience. 

One of the hardest things for traders to figure out is that everyday is not a day to push it.  Some days the best trade is to scan your list and realize your plan is not playing itself out.  I know the hardest thing for me to do is to sit on my hands when I haven’t had the best day.  Saving money on days like today and not overtrading will pay off in your check at the end of the month.  The flip side to this is when the market gives you a great opportunity and leaves money sitting in the corner you have to be aggressive and take it.  When your pre-market plan is playing itself out like Monday you have to push it and take on as much risk as you can handle. 

On Monday are plan as a firm was perfect.  But I know personally I didn’t have as good of a day as I should have.  This is my fault and its my job to find out why.  I took notes of what the market looked like and next time the well-defined levels in our plan are playing themselves out I will look for spots to add-on more size to my trades.  I also will look to have more positions in a broader range of sectors, so as to catch more of the move.   When the market pulls back into support and pauses I need to be more confident to put on more positions.  As traders we need to take advantage of days like Monday because days like today are always right around the corner. 

Nothing that happened today fit my plan.  I let the algos in RIMM chop me up even though I had the right side.  The volume was lacking in many of the moves today and it was very evident early in the day that it was going to be a tough day.  The key is don’t let these days go by without learning from them.  Learn to be disciplined when your plan isn’t playing itself out.  The disciplined trader will be around to take advantage of the good days and the gifts that the market sometimes provides.  Best of luck and have a great night. 

Kyle