End of the Quarter$

So ends the 3rd quarter of the year! The rally over the last 3 months has been more than impressive. The shorts have been bruised and batter and for the most part gave up. Today, we sold off fairly hard in the morning on poor manufacturing numbers only to rally in the mid afternoon and then late in the day , a bit of selling pressure entered the market.

So starts the 4th quarter and historically the worst month of the year, OCTOBER. It really is hard to make a prediction of what will happen, but we know one thing. The market has been strong with virtually no pullbacks. So initially we will be looking to get long and buy the pullbacks. However, we do believe that the markets rebound may be a bit overdone in the short term. We will continue to be diligent in our stock selection and will be involved in both sides of the market, long and short. We will keep an eye on the volume on the moves down as well as the moves up. If the market continues to consolidate as it has for the last 2 weeks or so, we will be patient to pick our spots and have lower trade expectations

$Debbie: How do you measure your month?

September has been the best month in the last year on my path to becoming a professional trader. After that statement most people will say, “ok, great…how much money did you make”? And then when I follow that question with my answer, “none, I lost a good bit of money this month”, most people will look at me as if I have ten heads.

September  has been “The” month that drove me to reach down deep inside my trading “gut’ and take a deep, hard, ugly  look at what was inside and decide if I  had what it takes to be a professional trader or not. I would venture to say that this is the point that most people quit.

The market demands, without mercy, focus, discipline, strong/balanced psychology, constant learning and skill development, and an alertness to change and the ability to adapt to change that is as quick as a leopard and as sharp as the blade of a knife.  

After, I was forced to take that “deep, hard, ugly look inside my trading, I was able to recapture that feeling of knowing, without one speck of doubt, that I know how to trade and can make money in this business. Simply put, I was able to regain my confidence by learning from my trading and making immediate changes in my actions to improve my trading. More importantly, I was harshly reminded that I have complete control over what I take out of the market on a daily, weekly, monthly, and yearly basis.

 I must add here that Keystone Trading Group has given me the ability to know what I know. They provide a system, education/training/mentoring, and a forum by which traders become a part of a collaborative team.

Here is to October!

 Happy Profit Taking All!!

 

Debbie

Never a dull moment in the markets…

Even on a light volume day like today, we have some activity worthy to of a mention. Monday continue to produce some nice Merger Arbitrage opportunities as companies have found it easier and safer to finance acquisitions. Today we had a couple of $6bn deals mentioned XRX buying ACS and ABT buying the US division of Solvay. XRX traded down ACS traded up, as merger arbitrage funds took positions. For more information on Merger Arbitrage go to the following link https://keystonetrading.wordpress.com/mergers-and-acquisitions/ the markets have really started to show signs that we will be having more activity not less.

In addition today was worth mentioning that the equity markets bounced off the 20ma on the daily (see chart of SPY http://twitpic.com/jik3i ). The volume on this bounce may not have been very high, but it was nice consistence order flow to the buy side. So despite low volume, our traders were able to make money since the trend was much cleaner in many of the stocks and sectors we normally trade. The NASDAQ led the way higher with stocks in the SMH strong from the start. We also had the financial help out the market especially at the end of the day. As an intra day trader you need to capitalize when the sectors and stocks you trade are on the move. Friday was a day to sit on hands, today was a day to get involved.

At Keystone we have created a community of traders that is geared to maximize opportunities, by pointing out trades and days that have an edge, and maybe more importantly pointing out days or trades that HAVE NO edge. Stay away from the NO EDGE trades; they will burn a whole in your pocket as well as your psyche.

$Debbie: Turning A Drawdown Month Into A Trading Month Of Positive Growth And Learning

September has been the most confusing month for me since I started trading full time a little over a year ago. Just one month prior I had my most successful month and knew that I knew what I was doing. At the start of my draw down month I got beaten around, in a big way, and took a pretty good hit to my psychology and P/L . I was left winded and wondering what the hell happened.

I took some time to recover, reflected, studied charts, watched the market and got back in the “saddle” again only to continue taking small losses and some small gains. As a result, I was unable to recover from the big hit to my P/L that I took at the start of the month.

The one stock that was my best the prior month turned into my worst, trades that I knew were good trades either did not work or worse worked and then suddenly stopped working and/or reversed their original direction without warning, and momentum has been lost for most of the month (at least in comparison to last month).

Since we are ending a month, it is time for me to gather all of my journal notes and do a cumulative overview of what happened.

As a trader, first I remind myself that I am solely responsible for my trades and my trading outcomes.  The market left me to figure out what was wrong with me and question what I missed because the market is neither right nor wrong. The market is simply a “machine” that just does what it does and does it over and over again.  

The following are my conclusions when I compare my August Performance to my September Performance.

1. I am a very poor range trader. I am good at trading a trend. In August my two financial stocks basically trended much of the month.
2. I failed to cut my initial loss on a trade decisively because I was expecting them to trend like they did much of August. I expected follow through at times when I should not have based on the internals.
3. I tended to switch between stocks in my basket looking for something to do whereas in August I almost exclusively traded one stock.
4. I failed to recognize early enough that there was a significant change in momentum between August and September.
5. I failed to recognize early that breakout trades which worked almost all of August did not work at all in September.

The above six items really boil down to me not adjusting to conditions that changed and trading accordingly. Hence,  from my expensive  “trading class” this month I learned that I need to recognize the changes from month to month, day to day, and moment to moment in the market and stock conditions, adjust my trading to those changes, and embrace the change as opposed to trying to resist it or fight it.

To conclude my self-reflection, I am also taking the time here to remind myself and take pride in the fact that I know how to trade and I can trade effectively and make money as a result. So October begins a new month and a month where Debbie’s drawdown ends.

The question is: How do you turn a draw down month into a trading month of positive growth and learning?

1. Take full responsibility for your trading decisions and actions and don’t allow yourself to think that it’s the market.
2. Use your journals, past and present, to compare and find those hidden insights that we can easily miss from day to day.
3. Remind yourself of what you have learned and the progress you have made since the beginning of your journey. You know what you know. It’s a matter of using it the right way in the right conditions. And draw the “line in the sand” where your drawdown ends and where you regain control of you and your trading.

 

 Profitable  Trading All!!

 

Debbie

Video: two hour stock trading mastermind meeting

One way or another as a trader you will pay for a trading education. It will either be through time and losses or you can take classes.

Keystone feels classes alone are not enough, mentoring with real capital is the only proven methid to teach trading for a living.

Each month Keystone Trading Group holds a Mastermind meeting to provide continuing education for our proprietary traders and for those traders who would like to take their trading to the next level both for consistency and and increased profits.

If you would like to learn more about trading our capital please click here.

To view the 120 minute video of our September Mastermind meeting copy and paste the following link into your web browser:

http://keystonetrading.acrobat.com/p70226411/