This video may be a little harder to read than most, because I went over the length limit that youtube enforces. So, I had to copy the file over to my mac, and transcode it in the process. Somewhere along the line, the aspect ratio go “preserved” which put black bars on both sides. Oh well… it may help to view the video at the youtube site, in full-screen mode.

Four trades, none of which had a big payoff. yawn.

After the recent Livermore smackdown at ugly’s blog, I thought I should re-read Reminiscences of a Stock Operator. So, I picked up a copy today, and will read it over the next couple days. Last time I read it was a long time ago, and I know a lot more about trading now than I did then. It will be interesting to see where my opinion on him ends up now.

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As explained in the video, I’m starting to think harder about fibonacci retracements, and whether I can justify a meaning for them. In the past, my position has been that the lines just give you a nice psychological “budge” that allows you to pull the trigger easier. You know, like instead of waffling “has it retraced enough… is it showing enough strength now, or should I wait?” … you simply wait for it to cross the magic fibonacci lines and jump in. But, maybe there could be more to it than that. Jury’s still out… it certainly didn’t improve my returns today! :-)

… and here’s some fibonacci propaganda I found:

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Watch this post's video on Youtube

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Look at these charts of the ETF’s for the major indicies going back one year:

DIA, aka Dow Jones Industrial Average:
Chart as of 3-09-2007 vs. Chart Today (3-21-2007)

QQQQ, aka Nasdaq-100:
Chart as of 3-09-2007 vs. Chart Today (3-21-2007)

SPY, aka S&P 500:
Chart as of 3-09-2007 vs. Chart Today (3-21-2007)

Do those Fibonacci retracements catch your eye? All the cheerleaders saying “the correction’s over!” might want to curb their enthusiasm a bit. The volume on our “rebound” this last week has not been impressive to me at all. I think that there’s more excitement to come in the near future…

EDIT 3-21-2007: Looks like the excitement was to the upside. I guess you can’t predict ‘em all!

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Take-Two Interactive Software, Inc. (NASDAQ: TTWO)

TTWO was a gap scan candidate. I entered below the OR high (a higher-risk flag), with a target of the 119% fib extension:

Once again I entered well, managed my stops well, but botched the exit. TTWO blasted up above the OR high, and quickly put me up 2R. It didn’t hit my target, so I held on until it closed back below the OR high, and I got out to avoid a loss (which I would have had if I had waited some more). I should have ratcheted up my stop to 1R at +2R, but the prints were pretty volatile and I didn’t want to get chopped out. It was really surging and I thought it could make my target if I held, but I was wrong.

I cranked up my % equity at risk for this trade to ~3.9% ($50). Without a textbook Trader-X setup, I shouldn’t do that. That system has a very high win rate if you pick ‘em well, and a 4% risk is justified there, but with anything else I need to stick with a 2% max equity risk (like my rules say).

This trade further shows where I am at in my progress as a trader. When I began, I was a very consistent trader–I could consistently lose money! I have been able to consistently not lose money for a few months now (since I switched to Zecco), and lately I can consistently break even. The next phase of my trading should be to start to consistently pull in profits. At least I’m out of the n00b-trader woods. :)

Please, any suggestions for profit-taking / preserving would be greatly appreciated! My only thought is to enter my initial stop as a hard stop, and then change to a trailing stop of 1R height once I’m up 1R. Then, if the target was not met, the exit strategy for a daytrade would be to wait until the end of the day, or a candle close below the 5-ema, or hitting the trailing stop. This way I’d give back the top 1R of the move, but in the worst case I’d break even…

Trade Summary:

TTWO Long 130 Shares
Entry: $20.21, Stop: $19.88, Target: $21.11
R: $42.64, Exit: $20.24
P/L: 0.10R, or $4.17

Stocks Mentioned In This Article
Stock	Links
TTWO	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com