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$Rich AXP Broke And Then Flatlined….

August 31, 2009 Leave a comment

Took the break down this morning and it went no where for 4 hours!!! Due to the market doing nothing all day. Booked Small profit.

aaaaaa

Then took it again thinking it would break the .50 level..no luck

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ehh today was a boring day with nothing to do but sit on your hands and be disciplined.

Took small loss for the day…not trading anymore today till the market picks up some steam..aka the vix moves out of its .10 range!

Categories: Uncategorized

$Deb Says: Why and how should traders condition the mind?

August 30, 2009 5 comments

The best analogy that I can find for this topic can be found in the sports world. Professional athletes do a tremendous amount of physical conditioning and mental conditioning in their training to become and be the best at their game. Traders, much like the professional athlete, must work toward conditioning themselves to become the best trader possible. This post will focus on mental conditioning as opposed to the physical for the obvious reason that much of the trading “game” is mental.

I have found that once I developed a system of mental conditioning for myself that my trading improved exponentially in a very short period of time. The following describes what I do as a trader in my “batting practice” which is intensely focused on my mental conditioning.

I started with the following sentence that I tell myself at the start, middle, and end of each day and anytime in between when I need to hear it. That sentence is:

“I am a professional trader sound and act like one”.

Following that everything that I think, do, and don’t do must stem from and depend on that one statement. By using this statement I am constantly affirming what I believe about myself, what I expect from myself, and what I need to do based on that belief and expectation.

Next, each day and each week I study my trader report and although I look at all components of the report, I focus heavily on the following:

  1. Stocks traded & which stocks I was net profitable in and which stocks I lost money on.
  2. How many trades I traded actively and passively.
  3. Trader performance. Specifically I spend a considerable amount of time following my “BAT” and “W/L” columns.

Notice that P/L is not mentioned. I do not focus on P/L; rather, I look at it daily just to know where I am so that I can put it into my money/risk management plan for the week, day, or moment.

Last, every Sunday I have a meeting with myself for actual “batting practice”. This includes the following.

  1. I analyze at least 2/3 good trades and 2/3 poor trades.
  2. I go through the actual aforementioned trades identified using the tick replay function on the trading platform.
  3. I act as if I were trading it all over again and I use the stop loss parameters that I have so I can identify what would happen if I increased risk or decreased risk. This allows me to see where I would be stopped out, what loss I would take on that particular trade, and how many like it I could take before I reached my daily stop loss. This has helped me to be able to take the risk so that on good trades I can hold on longer and on bad trades I can cut them fast. And, if I do happen to take a big hit, it is not traumatizing rather, I conditioned myself to accept it and move on.
  4. I use the tick replay as well in my planning of future trade scenarios. If you know what happened before in price action then planning for future price action is a natural next step.

This mental conditioning has been essential in my development as a trader and I believe that without it I would not have made the progress that I have made. In short, building mental stamina to intensely analyze yourself and your actions as a trader, practice over and over again, and get your mind to feel comfortable with the risk that one must take to make gains is a must to being a successful, professional trader.

$Deb Says: When is “the” time to really be ticked at yourself as a trader?

August 28, 2009 Leave a comment

Trading is something that takes a lot of time, patience, and skill development. Professional trading is not an art or a skill; but an art and a skill rolled into one.

That being said, it is very easy to really beat oneself up along the way which is counterproductive to what is psychologically necessary to enter into, progress, and continue to develop and master new, higher levels in the learning process.

Hence, there will be many occasions when a trader will make mistakes. It is a natural part of learning. As long as mistakes are used to learn from then mistakes are the “tool” needed to promote learning.

The following question comes to mind: Is there a time when one really needs to be ticked off at herself? I say yes as I recently experienced one of those moments.

Yesterday AXP opened strong, broke down with the market, reversed, and then rallied/trended all day despite the market being stuck in the days range and the previous day’s range for a majority of the day. I put on a position at a significant breakout level and waited for follow through. It “played” around but I believed in the trade so I held it. It moved in my favor and reached the next whole number that I was watching for.

When it hit the whole number and blew through it, I followed my plan to book half the position and hold the rest with a stop at +1 making the trade a free trade at that point. I did this because I felt the need to protect gains as the market was not yet confirming an upside move. AXP was moving with its own wind behind its back.

My original profit target was approximately .50 or so cents away. AXP made another move and stalled so I decided on the spot to book the profit I had despite the fact that I was holding a free trade. Remember the worst that could have happened was I would get stopped out at +1.

After I booked profit and was no longer dancing with AXP, the SPY took off, broke to new highs, and did so for a portion of the afternoon and AXP blew through my original profit target by .20 cents or so.

Why should I be mad at myself in this situation?

I am mad at myself and should be because I had the perfect entry (that was never seen again in the day) and a stop loss that gave me, at worst, a free trade. I had NOTHING to lose. One must keep the profit target in mind and be completely in tune with the price action in front of oneself as one never knows when a simple free trade will become the trade of the day.

Deb Says:Why are expectations so important?

August 27, 2009 Leave a comment

This post starts out with a quote that I think is extremely important to all traders . That quote is:

” If market behavior does not conform to expectations, get out”…Schwager

If you think about it, as traders all of our trading decisions and actions stem from our expectations regarding price action and sentiment in the market and in individual stocks.

Hence, its really simple and short when the market’s behavior does not do what you expect it to do then just get out. Meaning, do not hope!! Hope is deadly to traders.

$Rich I Paid My Amex Bill And The Stock Ran To The HOD

August 26, 2009 Leave a comment

Today was a fun morning…Traded AXP and rang the register…Then played around with it and chopped around lost a little but still made out from my morning trade.

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Could have played the trade better. There is always next time…

Oh And the Fake Out Award Of The Month Goes To: HPQ

Which didn’t get me today!

Congrats HPQ!!

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Categories: Uncategorized

Morning Quickie $

August 26, 2009 Leave a comment

 

Keystone Morning Quickie        August 26th 2009

Market Commentary

 
 
 Futures are drifting lower this morning after a rise in Durable-goods orders was higher than expected, but the details in report were disappointing. Traders are being cautious ahead of new home sales data that will be out at 10am EST.

 
The trading environment right now is as expected. Late Summer, pre-holiday trading! That being said, We must be extremely patient in trade selection. The tug of war between the Bulls and Bears has become more evident over the last few trading days. After the big move up in the markets, the bears look like there ready to stand their ground a bit more. The rallies have been narrower and the pullback a bit stonger. However, we still have had little expectation for follow through to downside. We have been trading both sides of the market taking small profits, small losses. With the volume light, the moves will become even more erratic until we put the labor day holiday behind us.  So, Please be selective in your trades and call it a day if you get some profits in your account.

 
 
 
 

Call us at 212-594-8900 if you would like to discuss any of our trading programs.
 
 
 
 
 

Technical Levels
 

50 Day          200 Day

S&P                                                                      954             877
DOW                                                                     8852            8318
NASDAQ                                                               1899           1654

Keystone’s Trades

 

Target (TGT)   long trade   – We are still sticking with TGT as a long candiadate.2nd quarter earnings fell 6.3 percent, but beat wall street expectations.   Since the earnings the stock has trended higher. The volume has been a bit light over the last few days, so we will see if the gains consolidate a bit at these levels and than look for an entry. We would look for an entry around $45.84

 

  Stop loss: $44.55  

 

initial Profit target: $ 47

 
Profit target: $50

  
 
Applied Materials (AMAT) short sale –  AMAT made 3 day lows yesterday and closed below the daily 20 EMA. It has had a strong rally since early July and it seems poised to test the bottom of the range around the $13 level

 

      profit target is $13

 

 

Stop loss: $ 13.75


 

 
Economic Numbers 
 

 

7:00 MBA Mortgage Applications
8:30 Durable Goods Orders
10:00 New Home Sales
10:30 EIA Petroleum Status
11:30 Fed’s Lockhart speaks on economy
 
 
Notable earnings before Wednesday’s open: DLTR, WSM
Notable earnings after Wednesday’s close: CWTR, GES, TIVO

 

 
 

 
 

 

 

Top News Stories
 

 

BoA settlement “at war with common sense.” The SEC and Bank of America (BAC), still waiting for court approval of a $33M settlement over Merrill Lynch bonus payments, will have to wait a little longer. Jed Rakoff, the federal judge presiding over the case, slammed the SEC yesterday, saying the decision to let individual executives off the hook is “at war with common sense.” The SEC said it will provide additional information requested by Rakoff by the new submission deadline of September 9.
 
Dueling deficit projections. Both the White House and the Congressional Budget Office updated their deficit projections yesterday. The White House expects the ten-year budget deficit to reach $9T, up from $7.1T, and said it will work to bring down the “higher than desirable” figure (though some note the ten-year projections are far less relevant, and less worrying, than the one-year projections). It expects a $1.58T deficit for the current fiscal year. The CBO forecasts a 2009 deficit of $1.6T and a ten-year deficit of $7.14T, arriving at the lower figure mostly by assuming tax cuts set to expire in 2011 will end as planned, despite the fact that they will likely be extended. (Read the CBO’s budget report (.pdf) or the White House report (.pdf))
 
Sony strikes back at Kindle. Gearing up for the holiday shopping season, Sony (SNE) unveiled a new e-book reader with wireless capabilities that could present the strongest competition to date for Amazon’s (AMZN) Kindle. At $399, the reader is $100 more than the entry-level Kindle but has a touch screen and, critically, allows readers to access books from a much broader range of sources, including temporary loans from libraries. The device will reach stores in December.
 
Confidence jumps. Conference Board’s Consumer Confidence Index jumped to 54.1 in August, markedly better than the consensus of 48 and higher than the 47.4 registered in July. Confidence “appears to be back on the mend,” Conference Board said of the rebound, though “spending is likely to remain constrained.” Investor confidence improved as well, with the State Street Index rising 3.5 points to 122.9 in August, the fifth straight monthly increase.
 
ING seeks final bank bids. ING Group (ING) is reportedly seeking final bids for its private banking operations, and hopes to get around $1.8B. ING received a €10B ($14.3B) bailout in October from the Netherlands, and is trying to raise up to €8B through asset sales to increase its capital cushion. Shares +3.3% premarket (7:00 ET).
 
Soaring stocks on no news. Fannie Mae (FNM) and Freddie Mac (FRE) continued to trade on extraordinary volume, making Fannie the top-traded stock yesterday and marking a 220% gain for Fannie in the last month. There was no news from either company, and analysts speculated the elevated volume was due to day-traders looking to make a profit. Vonage (VG) rocketed 165% in yesterday’s trading on volume of 33.2M shares compared to a daily average of 2.21M shares. The company announced last week that it plans to enter the mobile applications market, but once again, there were no recent news releases to warrant yesterday’s jump. FNM +5.4%, FRE +1.9%, VG +41.5% premarket (7:00 ET).
 
Toyota trims output. Toyota (TM) plans to halt at least one production line and cut capacity as part of a push to return to profitability amid an extended industry slump. Total cuts could reach 700,000 cars, or 7% of Toyota’s global capacity.
 
Chevron gas project get the go-ahead. Chevron (CVX) won Australian approval for a planned A$50B ($42B) liquefied natural gas project. The approval was one of the last steps needed to clear the way for the joint venture between Chevron, Royal Dutch Shell (RDS.A) and Exxon Mobil (XOM).
 
FAA investigates Southwest. Southwest Airlines (LUV) is under investigation by the Federal Aviation Administration for installing unauthorized parts on at least 42 of its jets and for failing to flag the problem. Though the parts don’t pose an “immediate safety issue,” some of the planes were temporarily grounded. The parts will be replaced in less than two weeks, but Southwest could still face civil penalties.
 
Snail-mail decline prompts USPS buyouts. The U.S. Postal Service, the nation’s second-largest employer, is offering buyouts to up to 30,000 employees in light of falling mail volume and a push for automation. The Postal Service hopes to cut costs by $6B in the current fiscal year.
 
Colonial goes bankrupt. As expected, Colonial BancGroup filed for bankruptcy protection yesterday, eleven days after regulators seized its banking operations and sold most of its assets to BB&T Corp. (BBT). The bankruptcy papers listed $45M in assets and $380M in debt.
 
Home prices continue to improve(.pdf). The S&P/Case-Shiller 20-City Home Price Index registered -15.44% in June vs. last year, better than the -16.4% consensus and last month’s 17.1% drop. This marks the fifth monthly improvement for the index, and the first quarter-over-quarter improvement in three years. The FHFA House Price I ndex (.pdf) rose 0.5% vs. +0.4% consensus, after rising 0.9% in May (revised). Nationwide, prices are down 5% from a year earlier and down 0.7% in Q2 from Q1.
 
Mortgage apps rise. Mortgage applications rose 7.5% from last week, MBA said. The average interest rate on 30-year fixed-rate mortgages rose to 5.24% from 5.15%.
 
Retail sales fall. Chain store sales fell 0.7% in the first three weeks of August, Redbook said, slightly worse than the -0.6% expected. According to ICSC, weekly sales fell 0.2% Y/Y but rose 0.6% from the previous week.
 
Richmond mfg holds steady. The Richmond Federal Reserve’s Manufacturing Index was unchanged, holding steady at July’s 14. Activity in the Central Atlantic region expanded for the fourth straight month, with shipments growing, new orders growing at a slight ly slower rate, and employment steadying. Manufacturers softened their outlook for the next six months.

 

 
 
 

 

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$Rich: What Do You Do When It All Lines Up?….Hammer It!

August 24, 2009 Leave a comment

Today was an interesting day for me. I had AXP and HPQ in my sight…pulled the trigger…BAM…then they got up and ran away from me…

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I took the opening 5 min candle breakout on AXP and got burned a little…it was worth it…had mega potential

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Then Moved Over To HPQ and saw it creating a powder keg and took the explosion and it was a fake out?!? It was a good trade and even know i lost money on the trade i would take it again and again and again because it was a perfect setup but just didn’t follow through.

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Categories: Uncategorized