Covestor - AdamBrooks Track Lists Posts http://www.covestor.com/mbr/adambrooks/blog AdamBrooks is tracking the following members: TimothySykes,YngvaiMalmsteve,noobtrader.08,oulous Thu, 08 Jan 2009 12:01:38 Covestor - http://www.covestor.com/mbr/adambrooks/tracklist/feed en http://www.covestor.com/img/logo.gif TimothySykes - Will You Please Be My Mentor? http://www.covestor.com/mbr/timothysykes/blog/19901 http://www.covestor.com/mbr/timothysykes/blog/19901 Thu, 08 Jan 2009 12:01:38
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]]> TimothySykes - 10 Of the Hottest Stocks Around, One Of Them Could Be A Buy Too http://www.covestor.com/mbr/timothysykes/blog/19892 http://www.covestor.com/mbr/timothysykes/blog/19892 Thu, 08 Jan 2009 09:01:57
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]]> YngvaiMalmsteve - Improving in the Gutter http://www.covestor.com/mbr/yngvaimalmsteve/blog/19906 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19906 Thu, 08 Jan 2009 08:01:00 $99 on it), I would've been in the green today.

First, I want to say that I'm going to have to back off on my detailed posts as the posts, trading, studying charts, etc, take a lot of time and I also need to keep my life outside of trading going. So, you may see less posting frequency and less detail. Occasionally I'll post a detailed one when I get the chance, but I can't be devoting so much time to this blog, as much as I like writing it.

The blog also is taking more time because now I'm doing multiple trades per day, and it takes too much time to describe each one.

I won't be updating my Covestor account anymore because, again, it takes too much time to enter each trade.

I want to thank all of you for all the advice you've given me. I tremendously appreciate it.

I've reduced my position sizes to about $1K per position today. This is so that I don't trade with scared money, and it really helped today. I need to EARN the right to use larger positions. I need to prove I can be consistently profitable with small positions, before I move to larger ones. If I get consistent with $1K positions, then I'll move to $1.5K. If I stay consistent, I'll move to $2K, and so on...but I'll never exceed $3-5K.

I also took the advice of taking partial profits, which I did on my overnight SGLP short. When it tanked to the $4.50ish range, I covered half of my position. I sat on the rest for a while, but when I saw some of the energy stocks spiking, and SGLP creeping up, I covered the rest. Overall it was a $136 profit.

I also had a solid short of AER when it was broke $5.26 support and I covered at $5.05. I had also shorted it early in the morning when it broke the previous intraday support. My profit for both trades combined was $64.

I still need to consider waiting 15 minutes or so after the open to trade. As Charlie G. perfectly describes here, I got shook out on the "Biotech Spike & Dip" pattern. I entered ANDS on the $3 cross at $3.05 within 5-10 minutes of the open. It held above $3 for a bit, but then didn't hold and started falling. I got out at $2.92 for a $69 loss. It eventually did recross above $3 later in the day, which would've been the perfect play as it eventually went above $4. I never re-entered as I was paying attention to other plays at the time.

I also chased AVZA when it was announced in the chatroom. It had pulled back to 25 cents and started moving back up, but I didn't get an entry until 34 cents. It didn't get far above that and I ended up getting out at 30 cents for a $48 loss. Now I know why Muddy likes to trade around the 25/50 cent marks for those stocks under $1. If I could've gotten in close to 25 cents, then great, but since it already moved so far, at that point I should've passed on it.

Also, NO ECN FEES TODAY!!!! YEAH!!!!!!!!!!! Sung at Cy Group called me and told me to use BATS as my primary ECN instead of Island or ARCA which I had been using. Good thing...I actually got an ECN rebate today of $1.16 rather than paying. My average cost per trade today was $2.46 (of course I was using smaller positions which also helped).

Overall I was feeling much more confident about my trading today than I have in a while. Now the key is to continue with that.

Related Stocks:  SGLP

]]> TimothySykes - National Lampoon Exemplifies Perfectly Predictable Penny Stock Manipulation That Is Great For Short Selling http://www.covestor.com/mbr/timothysykes/blog/19878 http://www.covestor.com/mbr/timothysykes/blog/19878 Thu, 08 Jan 2009 05:01:43
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]]> YngvaiMalmsteve - The Problem of Scared Money and Other Thoughts http://www.covestor.com/mbr/yngvaimalmsteve/blog/19874 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19874 Wed, 07 Jan 2009 12:01:00 Rick made an excellent comment in my last blog, and he is 100% correct.

He told me to look over my past blogs. While I don't have the time to read all 220 of them (has it really been that many? Wow!), I went back to my first blogs and went over many of the ones over the summer.

Three things stood out to me...things that have been a consistent problem in my trading from day #1.

1. Scared money

I had NUMEROUS situations where I got shook out of profitable trades. I had a number of trades that would've been HUGE winners if I wasn't trading "scared." This was happening from day #1, and continues to this day.

Now, the funny thing is I have NO problems finding trades and entering them. While I did sometimes have trades I hesitated to get into and missed, most of the time this wasn't a problem. The problem happened AFTER I got into the trade. That's when I got scared. This was primarily a problem on shorts, where I had many shorts that I exited prematurely without any exit signal.

But it's not limited to that. For example, I had the issue when it came to the ECN fees today. I missed a good entry because I was too worried about losing some money over the ECN fees rather than just getting the entry. If my trades are profitable enough, then the ECN fees are chump change. Sure, it would be nice to have each trade be cheaper, but I don't have that luxury. Timing is more important than the ECN fees.

2. Not taking partial profits

Some of you mentioned in my last blog that I should be taking partial profits when I'm up on something. Funny, because I found a number of past blogs where I gave myself the same advice, and seem to have forgotten it. This would also help the problem of "scared money" because, once I've locked in a profit, I would feel more comfortable in letting the remainder ride. And if the stock goes back to my entry point, I can get out with no worries.


Overall, the problems with my trading have been mostly in my exits, and not my entries or setups. Sure, occasionally I've entered a bad setup or chased, and there were some HUGE mistakes I made like trying to trade when I was out of day trades (and losing HUGE because of it). But most of the time my setups were good. It's once I was in when the problem arose. Either I didn't let a profit ride, OR I let it ride too long and didn't take partial profits and ended up with a loss instead. This happened SO many times and I mentioned it in SO many blogs it's amazing I haven't learned yet.

I kept changing my rules and changing my system. But overall it wasn't my setups that were the problem. It was ME. Me and my scared money and not trusting my setups. Me and my failure to lock in some sure profits when I had them, THEN let the rest ride to see. The latter is simply a case of greed. The former is a case of emotion and anxiety.

The "scared money" explains why I can paper trade fine but struggle when it comes to the real money. When I paper trade, I have no fear of commissions or ECN fees or anything like that. I simply see the setup and I go for it. But I lose that as soon as it comes to real money. And for me to be successful at this, that's going to HAVE to change. I need to act like it's not real money. But that's easier said than done.

I also need to stop changing my rules so much. I need to keep things simple. I will say that the market has been a bit different in the Fall then it was in the summer. Looking back at my old blogs, I see chart setups that I just haven't seen lately. There were a lot of clean breakout plays back then, and there weren't tons of stocks going 100% or more off their lows like there has been lately (due to the strong market rebound). The volatility has increased dramatically, and it's something that I've had a hard time adjusting to.

It's one thing to realize all of this. It's another thing to fix it. But if I'm ever going to make it at this, it needs to be fixed.
]]> TimothySykes - 12 Reasons Why I’m So Shameless In Promoting My Instructional Trading DVDs http://www.covestor.com/mbr/timothysykes/blog/19853 http://www.covestor.com/mbr/timothysykes/blog/19853 Wed, 07 Jan 2009 12:01:57
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]]> TimothySykes - 10 Hot Penny Stocks That Will Surely Make You Rich (Doesn’t That Get You To Click?) http://www.covestor.com/mbr/timothysykes/blog/19845 http://www.covestor.com/mbr/timothysykes/blog/19845 Wed, 07 Jan 2009 08:01:12
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Related Stocks:  MON

]]> TimothySykes - Thank You Satyam Computer (ADR) (SAY) For Proving My Point…Short Selling Isn’t Evil, Many Companies Are http://www.covestor.com/mbr/timothysykes/blog/19828 http://www.covestor.com/mbr/timothysykes/blog/19828 Wed, 07 Jan 2009 05:01:35
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]]> YngvaiMalmsteve - More Frustration But Better than Yesterday http://www.covestor.com/mbr/yngvaimalmsteve/blog/19860 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19860 Wed, 07 Jan 2009 05:01:00 Cy. I'm feeling some frustration because yesterday I kicked myself for not holding my positions until they hit my stop loss. Well, I did that today and it cost me.

Today the market was tanking and I went long on some prehits today and I held them too long.

I need to differentiate days like yesterday from days like today. Yesterday the overall market was strong. On days like that, your odds are good when you're holding a long position.

On a day like today, it's better to take your profits or losses very quickly when you're long. This will become more clear when I discuss my trades.

Another note for today is that I got too worried about ECN fees today and it ended up costing me. I need to trade like I normally would and not worry about the ECN fees. More on this later.

Today's trades:

TGB $-8.16
ICOG $-106.27
CTDC $66.77
PLCM $-111.65
SGLP $54.65
YRCW $25.81
FCH $-30.60
TREE $-21.87
PARD $-77 (from my IB account)

Open Positions: PLG (short, currently -$48), SGLP (short, currently -$20)

Now for each trade:

TGB: Prehit. Went long for 1000 shares on $1 cross at $1.05. It spiked to $1.17 and pulled back. I kept holding. However, it wasn't turning back up and I got out at $1.06 but ended up losing a bit because of the commission.

On this one, I need to recognize 2 things. When it spikes that fast, I need to take my profit quickly. Second, when the overall market is red on something like this, it's better for me to take my profits quickly rather than to let it run.

ICOG: Another prehit. This one hurt. I could've EASILY caught it on the $1.50 cross with an entry of $1.49 or so. However, I kept screwing around, trying to see if I could get a rebate as I was doing a 1000 share order. Of course, I only got filled for a little bit at $1.49 and I then missed my entry and ended up getting more at $1.54 and most at $1.60. So my average fill was $1.57 when it would've been $1.49 or $1.50. On 1000 shares, that's a $70 - $80 difference. When this one failed to hold above $1.60, I got out at $1.48. If I had my $1.49 entry, I would've had a minimal loss.

Next time, I'm not even going to worry about ECN fees. I'm just going to enter at the market price.

This is also an example of how, while the setup was good, it failed to run further with the tanking market. Again, best to take profits or losses quickly in this situation.

CTDC: This was my overnight short. It looked like it was bouncing off $3 support and I wanted to lock in my profit, so I got out at $3.11. Of course, it was a fake bounce and it fell below $3. Again, I need to wait for a 10/60 cross on the 5-minute chart as an exit signal for these shorts.

PLCM: Another prehit that I caught on the $15 cross at $15.07. It hit in the $15.30's but then fell. Again, it would've been smart to hold in a situation like this yesterday, but not today with a tanking market. I should've gotten out as soon as it fell back below $15. I got out at $14.58.

I need to remember: tanking market, get out quick....surging market, try holding unless it hits your stop.

Of course, another way to approach this is to simply get out if it falls below $15 regardless of the market (maybe have a stop of $14.90 or so), but then re-enter if it breaks it's previous HOD later (like if it surpassed $15.30ish later). As Johnny Vento pointed out, I could've done this yesterday when I got shook out of DDR.

SGLP: Shorted this on the 10/60 cross to the down-side. Entry was $5.14. I kept holding, but then I had a meeting at noon and I couldn't watch it so I got out at $4.99. However, right after that, my meeting got canceled! It closed at $4.92.

YRCW: Caught on the scrolling HOD list. It was surging despite a tanking market and also had red to green action. Entry was $4.55. It got into the $4.70's but then pulled back. The Dow then broke it's support on the day, and, REMEMBERING THIS TIME to get out quickly if the market is tanking, I got out at $4.62. This was a smart entry (although a bit slow...I had the chance to get in at $4.50 and I hesitated) and smart exit.

FCH: Caught on the scrolling HOD list and $2 cross at $2.01. It hit $2.07, but fell fast. Just like with YRCW, the market started tanking and I decided to get out quickly at $1.99. Most of my loss was from the commissions/ECN fees.

TREE: This was my other overnight short. It was very stubborn, trading sideways at $4 ALL DAY. I eventually got out at $4.04 because of my upcoming meeting.

PARD: Went red on the day and looked like it was fading. I shorted 700 shares at $2.90. However, late in the day, there was a spike to $3, and on Level II I could see there was a lot of buyers coming in. So I got out at $3. That was a smart exit, as it closed at $3.08.

SGLP: Shorted 400 shares near the close at $4.87 since it was a red floater after a big run-up and had a 10/60 cross to the downside on 5-min chart. Still holding.

PLG: Another red floater after a big run-up and 10/60 cross to downside on 5-min chart; I shorted 800 shares near the close at $2.19. I wish I had taken a smaller position (like 500 shares) because of the illiquidity. It closed at $2.25, which I didn't like.


Realized Overall Loss: $-190.80


The positives are that I lost less money than yesterday, and I learned some more things. The negatives is simply that I lost more money!!!! Despite these learning experiences, I don't like these red days and if I'm not careful, I can lose more money very quickly. If I have a few more red days, I'm going to take a break from trading.

Related Stocks:  CTDC, DDR, ICOG, SGLP, YRCW

]]> TimothySykes - How I Made $1,000+ As My TIMalerts Subscribers Made $6,000+ On The First Trade Of The New Year http://www.covestor.com/mbr/timothysykes/blog/19792 http://www.covestor.com/mbr/timothysykes/blog/19792 Tue, 06 Jan 2009 12:01:59
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Related Stocks:  CWST

]]> TimothySykes - 15 More Stocks Influenced By The January Effect http://www.covestor.com/mbr/timothysykes/blog/19782 http://www.covestor.com/mbr/timothysykes/blog/19782 Tue, 06 Jan 2009 09:01:45
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]]> YngvaiMalmsteve - My First Day Trading With Cy Group http://www.covestor.com/mbr/yngvaimalmsteve/blog/19810 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19810 Tue, 06 Jan 2009 05:01:00 Cy Group, but there are some bright spots in today's trades.

First, today's trade results, and then I'll briefly talk about each one:

DTG $-80
DDR $20 (I could've profited $500 on this one...more on this later)
CIT $-46.70
DRYS $-32
FEED $-89
COIN $-51.98

Open Positions: TREE (short at $4), CTDC (short at $3.21)

Realized P/L: $-279.68
Unrealized P/L: $29.40

Overall, I really should've had profits with some of the moves stocks made today. But again, I'm having a tendency to get shook out of trades too early. Most of the trades above, if I held longer, I would've had a profit on (particularly DDR...more on this later). I need to learn to trust my setups.

Now for each trade:

COIN: Caught this on the scrolling HOD list on the $4 cross. My entry was $4.09. It couldn't hold above $4 so I got out at $3.99. It bounced off $3.90 and hit $4.16 before closing at $4.05. While I wouldn't have profited much, I could've given this trade a chance to breathe since I didn't even have a $100 loss on my position (more on this later).

DRYS: This was a prehit and I caught it on the $15 cross. My entry was $15.07. It tried twice to hold above $15, and when it tried and failed twice, I decided to get out at $14.91. Again, though, I didn't even have a $100 or 4% loss on my position. DRYS eventually did go above $15 and is at $15.49 after hours now. While I wouldn't have had much profit, a profit is still a profit.

FEED: FEED was a prehit and had huge volume in the morning. I got in at $1.93. Then the momentum died and it started falling and there was a 10/60 cross to the downside so I got out at $1.84. AGAIN, I didn't have a $100 loss on my position. FEED bounced off $1.83 and went over $2. Another missed profit.

DDR: This is the kicker. I had a PERFECT entry at $6.05 when it had dipped back below $6 and then crossed back above it and was turning up. But I got shook out at $6.09. Why? I saw the Dow go red on the day, and it looked like the overall market was tanking. DDR had been following the Dow very closely and after 3 straight losing trades I decided I wanted to lock in a tiny profit. But DDR continued to move and went well above $7!!!!!!! With my 500 share position, I would've easily had a $500 profit.

DTG: Caught this on the scrolling HOD list, but I chased it. My entry was $1.44. I should've waited for the dip after the spike. Nevertheless, I could've easily held through...I sold at $1.35. It closed over $1.55! I didn't even have a $100 loss yet.

TREE: Shorted at $4 since it was a red floater WAYYY above the UBB, trading sideways, nearly 200% off its lows, and was fading despite a surging overall market. It closed at $4 and I'm still holding.

CIT: It looked like the Dow was going to break it's highs for the day and CIT had crossed $5. I got in at $5.08. However, the Dow bounced right off it's highs, and CIT followed. Since I wanted to experiment with getting ECN rebates, I put in an order to get out at $5 even though the price was at $4.98. It looked like it might fall further, so I decided to just get out at $4.98. But then it didn't look like I got filled completely, so I tried to close the rest of my position. I'm not sure what happened...I screwed up my order entry somehow (had too many shares in), but I ended up SHORTING CIT at $4.98!!!! I quickly got out $5.01. Luckily it was a small number of shares so it didn't cost me too much. With this one, though, I should've waited for the Dow to break it's highs as a confirm.

CTDC: Another big red floater outside the UBB. I decided to short it in the last 20 minutes of trading. I successfully got an ECN rebate on this one since the price was at $3.20 and I put in an order to short at $3.21. It hit my price a few seconds later. CTDC closed at $3.17. I'm holding overnight.


The positives from today:

I'm choosing good setups. The fact that most of the stocks I chose I would've had a profit on is a good sign.

The things I need to improve on:

I'm still trading with scared money, despite the fact I have $100K buying power!!!! The fact is, I need to trust my setups. My stop losses from now on will be over $100, rather than a 3-4% loss. If I had a $100 stop loss on all these trades, and held no matter what was happening as long as I hadn't hit my stop, I would've had profits on most of these trades.

That was my problem today...getting out of trades before they even hit my stop loss...most of them I didn't even hit a 3-4% loss on.

The other thing I may consider is waiting 10-15 minutes after the open rather than 5 minutes. A pattern I've noticed lately is that some of the prehits will spike out of the open, only to pull back. I end up buying near the high of the spike, and then get shook out on the dip. I've had this same problem paper trading....with my paper trading I noticed I trade better when my entries aren't so close to the open. I have a better picture of what the stock is doing. I should wait 10-15 minutes for the dip on anything that spikes out of the open.


So, despite my losses today, I feel encouraged that I'm recognizing good setups and getting decent entries. I just need to not trade with scared money, and trust my setups once I'm in.



EDITED TO ADD: KILLED BY ECN FEES!

I found out that the numbers posted above don't include my commissions and ECN fees! After those, my total loss is -$357. Ouch!!!!!!!!!

The ECN fees really kill you, particularly on the $1-2 stocks where you might play 1000 shares. For example, my total commission on DTG was $12 and my ECN fee was $6.17.

Under $1 stocks usually don't have ECN fees, although it depends on the ECN.

My average cost per trade was $8.55, a bit less than I paid per trade with Thinkorswim, but much more than I would've paid with IB.

I'm really going to have to figure out how to take advantage of those ECN rebates to reduce my costs on the trades where I might go for 1000 shares.

Related Stocks:  CIT, COIN, CTDC, DDR, DRYS, DTG, FEED

]]> TimothySykes - 5 Reasons Why Apple Inc. (AAPL), Google Inc. (GOOG) & Sirius XM Radio Inc. (SIRI) Are So Irrelevant aka Remember Tony Wible, Leo Kulp & Albert Lui’s Laughable $6.50 Price Target On SIRI http://www.covestor.com/mbr/timothysykes/blog/19768 http://www.covestor.com/mbr/timothysykes/blog/19768 Tue, 06 Jan 2009 05:01:21
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Related Stocks:  AAPL, GOOG, SIRI

]]> TimothySykes - A Short But Sweet Testimonial For My TIMraw Instructional DVD Package http://www.covestor.com/mbr/timothysykes/blog/19732 http://www.covestor.com/mbr/timothysykes/blog/19732 Mon, 05 Jan 2009 12:01:15
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]]> noobtrader.08 - My 2 cents on the recent "pay for chat" http://www.covestor.com/mbr/noobtrader.08/blog/19761 http://www.covestor.com/mbr/noobtrader.08/blog/19761 Mon, 05 Jan 2009 12:01:00
First, for those giving shit to Muddy and Laura about this transition... $?#$?#?%#?%%?#%$?#?$?#$?#?%?#%?#?%?#?#$#?%#?%?$#?$#?!!!!!!!!!!!!! Show some f*cking respect!

Second, having been out of the loop for a bit, due to my recent trading-train-wreck, I have to say that I'm not the least bit surprised this transition took place. It was discussed several times WAY before IL started hosting the chat, so for those who are giving IL shit, stop.

And third, before I ever made my first trade, I entered the GOTS chat feeling like a small fish in the big sea (still do, but I know who's-who now...) and I knew entering I had zero to offer. However, I took a chance, said hello (during AH of course), and to my surprise people in the room kindly replied back, saying hello, sharing a few of the chatroom tips and rules, giving me useful sites to check out... all-in-all very helpful.

Laura, again, thank you SOO much for all your time teaching me what ADR meant! HA! Remember that lesson?! You gave me a lot of honest, useful information... and still do when I ask... for that I'm greatful and willing to pay.

The successes I've experienced over the past six months were 100% due to being in the GOTS chat. You can make the monthly fee in 30 seconds off one trade in this chatroom... trust me I've done it, several times.

Just remember it only takes a few bad apples to spoil the bunch... this was done to filter out the wanna-be's, the free-loaders and probably because the information we get in the chat is fucking worth more than what they're charging! Duh!

I'm signing up in the next week or so... can't wait to get back into it!

PS - This post isn't directed at people who can't afford the monthly subscription or people who can't be in the chat enough to warrent the cost.

Good luck!
]]> YngvaiMalmsteve - My Thoughts on the Recent Chat Move http://www.covestor.com/mbr/yngvaimalmsteve/blog/19754 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19754 Mon, 05 Jan 2009 11:01:00 GOS/IL chatroom is moving towards a pay/subscription model.

I had heard the rumors that this would happen about a month ago. I won't be signing on, mainly for financial reasons. I'm already going to be paying $80-$90 per month for my Cy Group data feeds, and am also paying about $24 per month for my advanced Stockfetcher subscription. So, as great as the chatroom is, I can't be paying even more per month. If I can get good enough at trading to where the monthly fee becomes chump change, then I'll be back. But for now, I will be going at trading on my own.

There are obviously pros and cons to this move, something Charlie does a good job of talking about here.

I'm disappointed in the negativity shown towards Muddy and Laura regarding this move. Look, guys, Muddy and Laura have gone out of their way for a long time now, giving out TONS of information FOR FREE. If you provide something of value to people, then what's wrong with trying to make money off of that? I say more power to them. What they're doing is really no different from any other successful trader, like Timmay and the guy at The Kirk Report. The only thing I didn't like about Timmay's move is that his site has become like one big infomercial.

When you are a wealth of information that is of value to a large number of people, then there's nothing wrong with wanting to profit from that. For example, I was on a message board once and someone found out that I had a strong research background in exercise science. The person started asking me a lot of questions about strength training. I began to answer his questions. However, he continued to ask me questions that were more and more detailed. Every time I answered a question, he would ask another one. I finally had to cut him off and tell him that I normally charge people for the info I was giving (I was a personal training part time at the time), and that I had already given him a large amount of free information and I couldn't give him any more. While I certainly don't mind giving out some info for free, I also needed to make a living. I went to school so that would make money off of my knowledge.

For those of you who are upset that the chat isn't free anymore, don't worry. YOU DON'T NEED IT! Muddy was trading on his own for years and was really successful without any chat. You can learn the Muddy method by studying all of the old blogs and putting the time and effort in.

You will be a better trader in the long run by becoming self-sufficient. Sure, alerts are cool and helpful, but you will have the most success in the long run through hard work and diligence. And you don't need the alerts! Study Muddy's old blogs. Learn how to use the scrolling HOD list. Get an $8/month basic Stockfetcher subscription and learn how to scan for day rangers. Get an IB account so that you have good short availability and access to the preleader list. Just put the time and effort in. Some of you who've been reading my blog know about all the work I've been putting into this. If you really want to be successful at this, then you need to put the time and effort in, chat or no chat.

Another advantage to NOT being in chat is that you won't be tempted to overtrade! As the chat grew, a lot of noise came with it...a lot of alerts that weren't very useful. You can end up in a situation where you try to jump in on a lot of the alerts and you end up chasing trades (which I did sometimes paper trading). Sometimes by the time an alert comes out and you pull up the ticker/chart, it's too late. By NOT having this extra noise, and trading on your own using the scrolling HOD list and scans, you will benefit from the extra focus.

And to Muddy and Laura...I thank both of you for all the time and effort you've put in the past towards helping your fellow traders! I appreciate everything I've learned from the both of you, and I will keep trying to apply what I've learned to my own trading so that I can become a good, self-sufficient trader.
]]> YngvaiMalmsteve - Tuesday Watchlist http://www.covestor.com/mbr/yngvaimalmsteve/blog/19755 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19755 Mon, 05 Jan 2009 10:01:00 Short (Market Tied): FTK, AER, SOA, PRSC, MEG, ACAS

Longs:

UBB Piercers coming out of Muddy Zone: LVWR, MU, KRY, ASTM, UEC, CLNE, TELK, NAK
Vento Pennies: KRY, TRMP, HEB, SSN
Breakout: DM, DISK, GTCB, FHC
Breakout (market tied): RDN, MIC, CRAY

Related Stocks:  RDN, TELK

]]> TimothySykes - 9 January Effect Penny Stocks To Watch Today http://www.covestor.com/mbr/timothysykes/blog/19724 http://www.covestor.com/mbr/timothysykes/blog/19724 Mon, 05 Jan 2009 09:01:33
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]]> YngvaiMalmsteve - Monday Position Update and Cy Update http://www.covestor.com/mbr/yngvaimalmsteve/blog/19743 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19743 Mon, 05 Jan 2009 05:01:00 $100 loss. This wiped out my KFN profit from last week.

I completely broke my 30-minute shorting rule on this one. If I hadn't broken that rule, I would've gotten a better entry later in the day around $1.65. It closed at $1.55 and I would've been up $100 and be holding and not have used a day trade either. I was using my IB account (I was having login issues with my Cy account) so I couldn't get re-entry later in the day (no more day trades left until Wednesday).

I don't know how many times I need to drill it into my own head not to short early in the morning (unless I get a gap and crap), at least with the types of shorts I do (the big overextended ones). I rarely have winning trades when I short big run-ups early in the morning.

With my IB account, I NEED to wait on those shorts...period. I should leave the more aggressive shorting for my Cy account.

Regarding Cy, my account is now ready (got the log-in issues finally fixed). There are limits on my trading, though. I am limited to 2000 shares per position (just fine for these low priced day rangers...I typically don't do more than 1000 shares, and much less for the ones over $4-5). I am also limited to a $500 loss per day. I'm also limited to 5 open positions (not sure if that's at once or for the total during the day). All of these limits are perfect for what I'm looking to do.

I will need to update my subscription so that I get AMEX quotes. Currently I'm only subscribed to NYSE, NASDAQ, and ARCA. For example, I wouldn't have been able to short DNN today as it's an AMEX stock. I've put in a request for the subscription but it takes 24 hours so I won't be able to trade AMEX stocks probably until Wednesday.

So, tomorrow I may be making my first Cy trade. We'll see.

Related Stocks:  DNN, KFN

]]> TimothySykes - Podcast Interview: Day Traders Reacting To Market Volatility http://www.covestor.com/mbr/timothysykes/blog/19717 http://www.covestor.com/mbr/timothysykes/blog/19717 Mon, 05 Jan 2009 04:01:14
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]]> oulous - New open chat room via Skype for traders of all skill levels http://www.covestor.com/mbr/oulous/blog/19708 http://www.covestor.com/mbr/oulous/blog/19708 Mon, 05 Jan 2009 02:01:53 The great traders from Green on the Screen and Dark Side of Trading merged with a site called Investor's Live. They had a wonderful free chat room but decided over the weekend to make it a pay site.

I don't know if I can capture the same momentum but I am opening a free public Skype trading chat that will follow the same rules as the Investors Live one did.

Momentum alerts only and no idle chat or spam. Stick to the rules and save all off topic chat for after hours or IM's.

Follow the link to join the chat.

http://wenonot.blogspot.com/

I am part of a small group of traders that communicate via Skype and anyone who shows skill over time via the open public chat is welcome to join us. The traders in my private chat are equal or better than Muddy, Sykes, Laura, or anyone in the chat room. We try to add people very slowly to keep the room cohesive.

It will take time to rebuild the great thing that Muddy and co captured but if you stick with it maybe we can.


]]> TimothySykes - To My 2,600 Covestor Followers & Everyone Else: How I’ve Achieved A 1,430% Sharpe Ratio & Return of 5,374% Return http://www.covestor.com/mbr/timothysykes/blog/19685 http://www.covestor.com/mbr/timothysykes/blog/19685 Sun, 04 Jan 2009 12:01:34
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]]> TimothySykes - Why I Shorted Casella Waste Systems Inc. (CWST) & Made My Subscribers $5,000+ In One Day http://www.covestor.com/mbr/timothysykes/blog/19678 http://www.covestor.com/mbr/timothysykes/blog/19678 Sun, 04 Jan 2009 05:01:28
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Related Stocks:  CWST

]]> TimothySykes - My Mom Just Joined Facebook, Please Befriend Her! http://www.covestor.com/mbr/timothysykes/blog/19649 http://www.covestor.com/mbr/timothysykes/blog/19649 Sat, 03 Jan 2009 13:01:00
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]]> TimothySykes - Nassim Taleb & Benoit Mandelbrot Interview: BM Looks Exactly Like Gothmog! http://www.covestor.com/mbr/timothysykes/blog/19643 http://www.covestor.com/mbr/timothysykes/blog/19643 Sat, 03 Jan 2009 06:01:57
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]]> YngvaiMalmsteve - Swing & Position Trading Using the 10/60 cross http://www.covestor.com/mbr/yngvaimalmsteve/blog/19651 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19651 Sat, 03 Jan 2009 03:01:00 10/60 cross to target entries and exits when trading intraday....what if we used this on day charts for swing and long-term position trades?

So, I did a lot of messing around in Stockfetcher, seeing what I could come up with. My first filters I came up with did pretty good, but only if you were trading in the market direction. I had a long 10/60 cross to the upside filter that beat the market every year from 2003 to 2007, but then did horrible in 2008. Likewise, a short-biased 10/60 cross to the downside did well in 2008, but not so good in the other years.

It's no wonder that so many position traders, mutual funds, etc., have such a tough time beating the market. It's a lot easier to predict what a stock might do intraday then what it might do over days, weeks, or months. And the market is nearly impossible to predict.

So then I thought about the Correlation Calculator. If I want to beat the market, I want to be long in stocks that don't fall when the market falls. Likewise, I want to short stocks that don't rise when the market rises.

So I tweaked my 10/60 day cross filters accordingly. For long crosses to the upside, I chose stocks that were green on red market days more than 60% of the time. For short crosses to the downside, I chose stocks that were red on green market days more than 60% of the time. I also added a line to the long filter that the 60 MA had to be increasing for 10 days, and decreasing for 10 days on the short filter. This was to ensure I was trading with the trend.

I backtested them in Stockfetcher and both of them beat the market 6 out of the past 7 years.

Here's the filters.

/* 10/60 day cross to upside filter for longs */

set{close_ind, ind(^DJI, close)}
set{open_ind, ind(^DJI, open)}

set{ind_diff, close_ind - open_ind}
set{ind_up, count(ind_diff > 0, 1)}
set{ind_down, count(ind_diff <= 0, 1)}

set{stock_diff, close - open}
set{stock_up, count(stock_diff > 0, 1)}
set{stock_down, count(stock_diff <= 0, 1)}

set{indup2, ind_up + 1}
set{inddown2, ind_down + 1}

set{stockup2, stock_up * 2}
set{stockdown2, stock_down * 2}

set{correlate_up, stockup2 + indup2}
set{correlate_down, stockdown2 + inddown2}

set{both_up, count(correlate_up equals 4, 100)}
set{both_down, count(correlate_down equals 4, 100)}
set{indupstockdown, count(correlate_up equals 2, 100)}
set{indownstockup, count(correlate_down equals 2, 100)}

set{indexupdays, both_up + indupstockdown}
set{indexdowndays, both_down + indownstockup}

set{indexupstockup, both_up / indexupdays}
set{indexupstockdown, 1 - indexupstockup}
set{indexdownstockdown, both_down / indexdowndays}
set{indexdownstockup, 1 - indexdownstockdown}

set{indexup_stockup, indexupstockup*100}
set{indexup_stockdown, indexupstockdown*100}
set{indexdown_stockdown, indexdownstockdown*100}
set{indexdown_stockup, indexdownstockup * 100}

indexdown_stockup greater than 60
and MA(10) crossed above MA(60)
and close above 1
and average volume(3) greater than 200000
and MA(60) increasing for last 10 days


/* 10/60 day cross to the downside filter */
set{close_ind, ind(^DJI, close)}
set{open_ind, ind(^DJI, open)}

set{ind_diff, close_ind - open_ind}
set{ind_up, count(ind_diff > 0, 1)}
set{ind_down, count(ind_diff <= 0, 1)}

set{stock_diff, close - open}
set{stock_up, count(stock_diff > 0, 1)}
set{stock_down, count(stock_diff <= 0, 1)}

set{indup2, ind_up + 1}
set{inddown2, ind_down + 1}

set{stockup2, stock_up * 2}
set{stockdown2, stock_down * 2}

set{correlate_up, stockup2 + indup2}
set{correlate_down, stockdown2 + inddown2}

set{both_up, count(correlate_up equals 4, 100)}
set{both_down, count(correlate_down equals 4, 100)}
set{indupstockdown, count(correlate_up equals 2, 100)}
set{indownstockup, count(correlate_down equals 2, 100)}

set{indexupdays, both_up + indupstockdown}
set{indexdowndays, both_down + indownstockup}

set{indexupstockup, both_up / indexupdays}
set{indexupstockdown, 1 - indexupstockup}
set{indexdownstockdown, both_down / indexdowndays}
set{indexdownstockup, 1 - indexdownstockdown}

set{indexup_stockup, indexupstockup*100}
set{indexup_stockdown, indexupstockdown*100}
set{indexdown_stockdown, indexdownstockdown*100}
set{indexdown_stockup, indexdownstockup * 100}

indexup_stockdown greater than 60
and MA(10) crossed below MA(60)
and close above 1
and average volume(3) greater than 200000
and MA(60) decreasing for last 10 days


Here's the back-test performance in Stockfetcher. This is with a 10% stop loss and a 10% stop profit. I tried other stop loss/profit combos but this was the one that gave me the best results.

Long filter return by year, and S&P 500 return in parenthesis:

2002: -47.89% (-24.31%)
2003: 73.14% (24.22%)
2004: 22.78% (10.51%)
2005: 30.26% (3.29%)
2006: 514.65% (12.48%)
2007: 15.83% (1.57%)
2008: -9.94% (-35.82%)

Average annual return: 85.5%

Short filter return by year, and S&P 500 return in parenthesis:

2002: 357.62% (-24.31%)
2003: -102.37% (24.22%)
2004: 122.45% (10.51%)
2005: 12.99% (3.29%)
2006: 62.4% (12.48%)
2007: 32.01% (1.57%)
2008: 82.39% (-35.82%)

Average annual return: 81.07%

Note that if you played both ways each year, the up years for one filter would more than balance out the down years for the other. For example, 2002 was a 48% loss for the long filter but a 358% gain for the short filter.

Average annual return for both filters combined is 83.3%

With both filters combined, 58% of the trades are winning trades.

Note that very few stocks come up on these filters each year. In 2008, only 7 stocks came up on the long filter and 52 stocks came up on the short filter. The nice thing about these filters is that there is a built-in protection against market conditions....you're only looking for stocks that are up in down markets or down in up markets. This limits your long plays in a down market like 2008, and limits your short plays in up markets like 2003.

These are pretty good filter results for position trades. I may start using these to supplement my strategies.

Related Stocks:  MA

]]> noobtrader.08 - My 2008 goal, my 2009 goal, and other thoughts... http://www.covestor.com/mbr/noobtrader.08/blog/19636 http://www.covestor.com/mbr/noobtrader.08/blog/19636 Fri, 02 Jan 2009 12:01:00
I wrote several times last year about what my goal for the end of the year (2008) was; to take $4,863 and turn it into $10,000. Well, I didn't achieve that goal... The highest my account saw was $9,100ish... (don't recall the exact $$ figure). However, looking at my total commissions, I actually (at one point) had around $7,000 in profits... but commissions reduced this drastically. Tuition is high.

The last month and a half of '08 ended up nearly disastrous for me though. I some how (overnight) forgot how to trade, or got scared, or drank to much bottled water... (not that I'm that good as it is, but I do know a little bit!). I ended up losing almost $4,000 in two weeks... WTF!?!? How did this happen? The only thing I can think of is I bought a house, perhaps got distracted by the holidays... who the f*ck knows... what I do know is that the little bit of confidence I had was shattered into a million pieces and I went into a depression.

Life has a funny way of teaching us humility (I've got to much of it at 30). Kind of like when you're favorite baseball player goes into a slump after the All-Star break, when he was on pace to break Hack Wilson's RBI record before the All-Star break... yeah, that was me.

Fast-forwarding to today, I've pulled myself out of that depression/mental slump, had an awesome holidays with family and friends (mom and sis came from the East Coast), and I'm finally getting settled into my new abode. AND I don't give two shits about New Years resolutions... as I've written before, I don't like setting myself up to fail. (just my opinion on the subject).

For 2009, now that I've got 6 months trading experience and a clean slate, I will wipe my tears, dust myself off and try again to hit my goal of $10,000. This time though I'm starting with only $4,267 (this is how low my account got during my "losing" streak). Once I've hit this goal and I will hit it (I need to see $10,000 as my "Net Liquidating" amount), my next milestone will be the ever infamous $25,000 mark. One step at a time though.

Newbs... I've written this numerous times... trading isn't that difficult once you've got a few tools that work for you and they are out there... check out Darkside and GreenOnTheScreen... READ IT AND READ IT AGAIN! The psychological stuff is what makes trading hard, at least this is the case for me.

And if you set a goal for yourself (in anything) and you don't hit, don't give up. Be honest with yourself, believe in yourself and remember that even though you may want something "right now" sometimes life isn't ready to give it to you "right now". Trust the process though and you will achieve it.

My first and only trade today netted me $45 and it felt great to start the year with a green trade.

Good luck to all in whatever you do in 2009!
]]> TimothySykes - A Cool Video That Teaches An Important Trading Lesson http://www.covestor.com/mbr/timothysykes/blog/19613 http://www.covestor.com/mbr/timothysykes/blog/19613 Fri, 02 Jan 2009 12:01:54
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]]> TimothySykes - 8 Stocks To Watch While Lazy People Are Off Celebrating/Missing Opportunities To Enrich Themselves http://www.covestor.com/mbr/timothysykes/blog/19610 http://www.covestor.com/mbr/timothysykes/blog/19610 Fri, 02 Jan 2009 10:01:04
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]]> TimothySykes - Why It’s Funny To Watch People/US Government Try To Fight Economics http://www.covestor.com/mbr/timothysykes/blog/19595 http://www.covestor.com/mbr/timothysykes/blog/19595 Fri, 02 Jan 2009 05:01:45
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]]> YngvaiMalmsteve - Going Live With Cy Next Week http://www.covestor.com/mbr/yngvaimalmsteve/blog/19619 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19619 Fri, 02 Jan 2009 05:01:00 Cy. I will be going live next week.
]]> YngvaiMalmsteve - Positive, small start to the year http://www.covestor.com/mbr/yngvaimalmsteve/blog/19615 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19615 Fri, 02 Jan 2009 03:01:00 10/60 cross to the downside on the 1-min chart. My entry was $1.54. It hit a low of $1.33 before bouncing. It bounced pretty hard. I checked the "Long Risk Calculator" to see what type of bottom tails the red candles had, and I found a red wick calculation of 0.04, meaning that KFN doesn't like to close near its LODs. With the overall market showing a lot of strength, I did not want my profit to vanish, so I covered at $1.44 for a $90 profit.

Nothing big, but a smart trade and a nice little start to the new year.

Related Stocks:  KFN

]]> TimothySykes - 4 Reactions To PennyStocking Testimonial #736,732 http://www.covestor.com/mbr/timothysykes/blog/19563 http://www.covestor.com/mbr/timothysykes/blog/19563 Thu, 01 Jan 2009 12:01:41
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]]> TimothySykes - The Details Of Ticketmaster Entertainment, Inc. (TKTM)’s Deal With The Devil http://www.covestor.com/mbr/timothysykes/blog/19552 http://www.covestor.com/mbr/timothysykes/blog/19552 Thu, 01 Jan 2009 05:01:54
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Related Stocks:  TKTM

]]> TimothySykes - 13 Predictions For 2009 http://www.covestor.com/mbr/timothysykes/blog/19531 http://www.covestor.com/mbr/timothysykes/blog/19531 Wed, 31 Dec 2008 11:12:04
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]]> YngvaiMalmsteve - A Decent Broker Alternative for some of you http://www.covestor.com/mbr/yngvaimalmsteve/blog/19546 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19546 Wed, 31 Dec 2008 10:12:00 IB, you might want to check out SogoElite.

Only a $2500 minimum, and they should have good availability of borrows because they operate under Genesis Securities, the same guys Cy Group operates under (their borrows are most likely much better than Thinkorswim). In fact, their trading platform looks like Laser without the Level II. Not sure if it has the customizable scrolling HOD list.

Commissions are only $.004 per share ($1 minimum)! That's much cheaper than Thinkorswim, and is similar to IB.

Only downside I see is that you have to do broker-assisted trading if you want to play OTCBB stocks.

I've never used them, and there's only one review over on EliteTrader. I ran across them today. It might be a good IB alternative for those of you who can't do IB's 10K minimum, and you're looking for cheaper commissions than TOS.
]]> TimothySykes - 10 Hot Stocks To Watch, Just Learn PennyStocking Already & Get Out Of Debt Now! http://www.covestor.com/mbr/timothysykes/blog/19528 http://www.covestor.com/mbr/timothysykes/blog/19528 Wed, 31 Dec 2008 09:12:33
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]]> YngvaiMalmsteve - Laser Platform...first impressions http://www.covestor.com/mbr/yngvaimalmsteve/blog/19542 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19542 Wed, 31 Dec 2008 07:12:00 Laser Platform that I will be using with Cy Group.

The cool stuff:

1. The customizable scrolling HOD list rocks!!!!!! First, it alerts to true HOD's. The Scottrade HOD list has many false alarms; I'll often see stocks on there that aren't even close to their HOD's. While occasionally you'll catch a day ranger turning up from the bottom like that, you also get tons of noise on the Scottrade list and so many stocks scrolling so fast that it's easy to miss plays. Second, since Laser's HOD list only alerts to true HOD's, it moves much slower and it's easy to pick out the day rangers. Third, you can customize it by price. Thus, I can only watch for stocks under $20 if I wish. You can also customize it by volume, but when I tried a criteria of 10,000 shares, almost nothing showed up. I'm thinking that the volume criteria must be for the volume at the moment it's hitting the HOD, and not the total for the day. However, that's not really important because just customizing by price was good enough.

2. You can link all of the different windows you have open, similar to how you can link quotes in Thinkorswim to charts. Let's say I have all my windows linked, including the scrolling HOD list. A stock comes up on the HOD list. I double click it, and it now appears in my charts and in the level II box where I'm ready to put in an order. No need to take the time to type in the ticker after seeing it on the HOD list!

Not-so-cool stuff:

1. Charts aren't that great. So far Thinkorswim still has the best charts of everything I've used.

2. There's no "Close Position" or "Reverse Position" button like in IB. When I'm in IB and I want to get out of a position quickly, all I have to do is click "Close Position" and send the order. It doesn't look like I can do that with Laser; thus, some extra steps when you've got to get out of something quickly.

3. You can't move individual windows out of the overall Laser window (at least from what I could tell). That kind of sucks if I wanted to move some windows over to my 2nd monitor. In Thinkorswim, I can detach charts and quote windows and move them whereever I want.
]]> YngvaiMalmsteve - End of Month & Year Review http://www.covestor.com/mbr/yngvaimalmsteve/blog/19539 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19539 Wed, 31 Dec 2008 05:12:00 $1250 on the month, which was almost a 9% decrease in my overall account size. I had a ton of losing trades, and very few winners. While most of the losses were small, they just kept adding up.

I usually run a bunch of fancy stats but I don't want to bother with it this time...I know the stats are bad.

Here's my account for the month. I had a good start and then took a big hit on December 9th, where I had a bunch of losing trades in a row, including getting squeezed out of DRYS big time when I was way too aggressive on my short, and my position was too big along with it.



Here's my account since I started trading. I pretty much wiped out all of my gains that I made over the summer.



Here's my list of trades for the month. I traded very little this month compared to other months, yet did worse. I tried to be picky and trade less, but unfortunately it hurt me in the fact that my execution on some of these was far less from ideal. When you aren't doing very many trades, you've got to execute on them. You'll see A LOT of red on this table....more red than I've ever had before.



Some key notes about these trades:

1. Some would've been very profitable had I held. FRZ would've been a $250 profit if I had a wider stop. CPY would've been over a $500 profit but I got scared out of my position based on overnight news. LZR would've been over a $200 profit but my stop wasn't wide enough. I would've had almost $300 more profit on ANSV if I had just used a market order so that I got completely filled for 1000 shares before the close.

2. A few key mistakes really hurt me. My DRYS short was the worst mistake, shorting before any signals or weakness, and using a big position on top of it, leading me to over a $200 loss. Also, trying to play the NKTR breakout twice in a row when it failed both times (and I should've avoided this one based on Vento's comments regarding the intraday chart).

Eliminate or at least improve upon #1 and #2 and my month would've been a winning month or at least break even.


Obviously, this is all discouraging, but there's a few bright points.

1. I will be trading with Cy Group very soon. I will no longer have the shackles of the pattern day trader rule, and thus it will no longer affect my trading decisions.

2. I will have much more capital to work with in Cy Group, and thus I will be more willing to use wider stops and will be less likely to get shook out of winning trades.

What I need to work on in 2009:

1. Not getting shook out of trades so fast. This has been a continuous problem for me. I need to have wider stops on the more illiquid stocks. I need to let price action dictate if I get out of a trade, not news. I think trading with Cy Group is going to help me tremendously on these things, as I won't be trading with scared money anymore and I won't be so worried about perfection.

2. I need to return to smaller positions. With fewer trades, I started taking bigger positions (around $5K), and this led to bigger losses (like on DRYS). I need to return to the $2 - $3K per position. This will be easy to do with Cy Group and unlimited day trades, but I will need to do it in my IB account as well (as I will still be trading with that account, mainly for shorting big runups).

Related Stocks:  ANSV, CPY, DRYS, FRZ, LZR, NKTR

]]> YngvaiMalmsteve - Position Update http://www.covestor.com/mbr/yngvaimalmsteve/blog/19540 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19540 Wed, 31 Dec 2008 05:12:00 short LZR position at $8.07 when it went back above $8 early in the day today for an $83 loss. However, LZR ended up closing at $6.80....just what I wanted :(

I got shook out when I saw the ask go above $8, then saw the bid hit $8 as well. The price hit $8.08, but never went beyond that (my 4% stop loss was $8.06).

This is something I need to work on in 2009...having wider stops on the more illiquid stocks with big spreads. LZR's spread was as much as 2-3% of the stock's value at times. Thus, a 3-4% stop loss is too tight. I was smart to have a small position, but I need to also have a wider stop. My stop loss on this one should've been more like 6%.

That's not the way I wanted to end the year but at least it was a small loss.

Related Stocks:  LZR

]]> TimothySykes - Dear Leveraged Sellout & All You ‘Damn It Feels Good To Be Bankers’, You’re Even More Pathetic Than Randall Lane & Doubledown Media http://www.covestor.com/mbr/timothysykes/blog/19519 http://www.covestor.com/mbr/timothysykes/blog/19519 Wed, 31 Dec 2008 05:12:25
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]]> TimothySykes - A Solid Testimonial For My PennyStocking Part Deux Instructional Trading DVD http://www.covestor.com/mbr/timothysykes/blog/19495 http://www.covestor.com/mbr/timothysykes/blog/19495 Tue, 30 Dec 2008 14:12:22
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]]> TimothySykes - 10 Stocks That You Absolutely Positively Definitely Have To Know About http://www.covestor.com/mbr/timothysykes/blog/19485 http://www.covestor.com/mbr/timothysykes/blog/19485 Tue, 30 Dec 2008 09:12:20
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]]> YngvaiMalmsteve - Direct Access Trading Using Muddy's Methods http://www.covestor.com/mbr/yngvaimalmsteve/blog/19501 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19501 Tue, 30 Dec 2008 08:12:00 Cygroup's trading platform Laser. I'll be doing that over the next few days.

One thing that is going to be new is that I will now be direct access trading...I will be choosing which exchanges/ECN's to route my orders. With IB, I always just use their Smart order routing and it would choose the exchange/ECN for me.

This now adds a new dimension to trading. While it looks like I will still have the option to smart-route orders, I now have to worry about potential ECN fees. With IB, I had their bundled pricing, which means I pay a fixed rate per contract. With Cygroup, I will be paying a per-share commission, as well as a per-share fee from whatever exchange/ECN I use (if I use a marketable order).

This could potentially add up in trading costs. Let's say I buy 1000 shares of a $2 stock with IB's bundled commission structure. I would pay a $5 commission, regardless of where the order gets routed.

With Cygroup, I would pay a $6 commission. Now, let's say the order gets routed through BATS. If I use a market order so that the order gets executed instantly, I would pay an additional $.0025 per share. That's another $2.50 for a total of $8.50. That's close to the $9.95 that I used to pay with Thinkorswim.

Now, if I use a limit order that is not immediately executable, then I could actually get a rebate from the ECN (depending on which one). Let's say it's BATS again. Let's say I'm buying the stock and I use a limit order that is a few cents higher than the ask price, so it can't immediately execute. I'm adding liquidity to the market. In this case, when my order executes, I actually get a rebate of $.0024/share ($.003 for an AMEX stock). So in my previous example, I would get a rebate of $2.40, and the overall cost of my trade would be $3.60.

There are advantages and disadvantages to this.

The advantage is that, with limit orders, I would pay less per trade than I pay with IB, saving money on commissions.

The disadvantage comes to when trying to trade via the Muddy method. This method requires getting in fast moving momo stocks quickly. I may not have time to be messing with the price to try get rebates. For example, let's say I'm trying to catch a stock that's at $1.50 but moving fast...I move my limit to $1.52 but by the time I've put in my order, it's already at $1.55, and I miss my entry.

Now, I could always use the Smart order routing in Laser, but the problem is that Laser will then choose the ECN/exchange for me, and I may get hit with big fees if it's one that doesn't give rebates and/or if it's a marketable order.

One thing I could do is go ahead and eat the fees for the real fast moving stocks, and then for the ones that aren't moving as fast (like YGE today), I could go ahead and use the limit orders. Or, let's say I'm waiting for a stock to do a round $ cross. Let's say it's at 96 cents and moving up. I could put in a limit order at $1.01, and it will only execute if the stock crosses that point. The risk in doing this, though, is that if it doesn't hold above $1, I'm out for a loss (sometimes I like to wait a bit to see if the stock holds above the $ mark before I enter).

Any of you out there trading the Muddy method and doing direct access like this? I'd be curious to hear your experiences.

Related Stocks:  YGE

]]> YngvaiMalmsteve - Tuesday Position Update http://www.covestor.com/mbr/yngvaimalmsteve/blog/19497 http://www.covestor.com/mbr/yngvaimalmsteve/blog/19497 Tue, 30 Dec 2008 05:12:00 $138 loss.

I decided to re-short it near the close since it was a red floater after a big run-up, it tried and failed to hold above $8 twice, and it's still over 50% off its lows and is only up because of a Superman pump. I got filled at $7.75 and it closed at $7.78. I went for a more conservative position this time (only 250 shares). It's now down after hours at $7.65. I'm looking for this to fall below $7.

Related Stocks:  LZR

]]> TimothySykes - John Dvorak Is A Big Fat Idiot, Jay Adelson Is A Skinny One http://www.covestor.com/mbr/timothysykes/blog/19478 http://www.covestor.com/mbr/timothysykes/blog/19478 Tue, 30 Dec 2008 05:12:04
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Related Stocks:  AMD

]]> TimothySykes - I’ve Been