3 trades yesterday, 4 trades today…. I’m trading more and more, but I really shouldn’t be. Volume is still very low. I think I am just getting antsy, and also my internet connection kept me away from the markets on Monday.

You can tell by the black bands in the video that I talked too long, and had to edit down the video to make it under 10 minutes. Basically, I cut out a section where I give examples of choppy untradeable price action. If I had quicktime pro, I could maybe do the editing without re-encoding it. I may have to try that in the future.

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

I scalped my brains out this morning, and basically ran through over -3R in losses. I was off in my timing, and was holding too long and with positions that were too large / stops that were too tight for the volatility. Just trading poorly.

I tried to refocus myself, and looked for setups on higher timeframes than 1 minute. Zoomie called out a setup in ORA on Wallstreak. It had been basing for over a year, and had a breakout yesterday and a big gap up today. It was a Trader-X style setup. Zoomie traded it on the 30 minute chart, and I traded it on the 1 minute chart.

I wanted to play a breakout of $47 with a tight stop so that the payoff would be big if it moved. My first entry was too early as it turns out, and I punched out to avoid hitting the stop (which was too wide anyway). Strike 1.

Trade Summary:

ORA Long
Entry: $46.98, Stop: $46.60, Target: $0.00
Exit: $46.78, P/L: -0.54R

Trade Grade:

Next, I watched the setup to see what it would do. ORA made a higher low inside the base, so I entered pre-emptively inside the base to give myself some cushion, like I did yesterday with CFC, though my stop was still too wide. In the end, it moved to just above $47, but no volume really came in, so I bailed when price retraced back below $47. Not a loss, so foul tip.

Trade Summary:

ORA Long
Entry: $46.90, Stop: $46.60, Target: $47.60
Exit: $46.97, P/L: 0.19R

Trade Grade:

Just like with CFC, the third time was the charm for me! Volume dried up at $47 and the 15 minute timeframe was finally aligned with the 1 minute, guiding me to go long. I entered early, with a tighter stop this time. About 20 seconds later, ORA popped about $0.30 immediately and ran up about a dollar in 2 minutes! It was unreal, and Zoomie called it in plenty of time for anyone on Wallstreak to get in. I took a partial at the 119% fib, and then closed out the rest when I had to leave the computer. I thought that I would miss the 138% extension if I was away, which was my target just above $49. During that time I was away, ORA made it within a few cents of that level. Amazing.

Trade Summary:

ORA Long
Entry: $47.00, Stop: $46.70, Target: $49.23
Exit: $48.47, P/L: 4.32R

Trade Grade:

Net PnL Today: +1.05R (even after all my screwups this morning)
Prop Trading Return on Equity from 7/25 to 8/8: +11.7%

If I can keep from throwing money at bad trades, then my PnL should really take off. Trade well and the money will follow.

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

It’s pretty incredible the trade-rate I’ve kept up in May. The trend has been to make 7 to 15 trades a month. This month, I’ve made 21 trades so far, with about a week left to go. I hope it’s not a fluke! I think jaiku and wallstreak help keep my mind from wandering. People keep asking me what I think of this stock or that stock, and before long I’m placing a trade on it. :-)

Trade 1, CHB

Anyway, I made another trade at the open, this time in Champion Enterprises, Inc. (NYSE: CHB) for 1.93 R. The intraday chart is pretty meaningless, but I was playing a run up to the daily number from my 30-day High scan (I feel compelled to point out when I use the scan, now, since Prospectus asked me if I use it anymore).

Trade 2, HANS

The more interesting trade was the second one, on Hansen Natural Corp. (Nasdaq: HANS). As you can see from the daily chart, it’s consolidating a bit lately, but in a general uptrend:

… So, I would normally want to go long. In fact, I told Prospectus as much. But, later, I started to change my mind. HANS started looking like a more reasonable short. Here’s the intraday PNF, marked up with what I focused on:

… In my mind, it was starting to get volatile, with false breakouts both on the long and short side. It gave a sell signal on the first red line marked “pressure”, which I would never take, because (1) it’s against the trend, and (2) it would need to clear 41 before I would be comfortable. Then, on the second line marked pressure, it appeared to be pushing on 41. Interesting. I thought I could at least scalp a pop through 41.

Then, I pulled up a 5-minute chart, and saw this sort-of descending triangle. So, I decided to make a descending triangle play instead of a straight scalp. At my entry, the most recent high was 41.16ish, so that was my initial stop.

The trade got scary initially, because a lot of volume stepped in to push my trade into the red. But, until the price makes a higher high, it’s still an intact downtrend. It made a lower high at 41.06ish and I lowered my stop once it backed away. Then, it finally fell through 41 again. At this point, a decision has to be made… get out now, or try to ride it out. I watched it trade for about 30 seconds. Sellers were reluctant to offer shares below 41.99, and the ask had a very annoying habit of hopping back up to 41.01. So, I decided to get out.

Sadly, the spread was so wide, and the ask was so thin, that the only way I was going to make a profit this close to my entry was to exit with a limit order. So, I reluctantly put in a limit order for 41.96. From the first partial fill to the completion of my order, it took a full 3 minutes for them to sell me enough shares to cover my short. Was that because there were other bids competing with me? Nope. I could see on TotalView that I was the only one sitting on the bid, and I had the best bid. The damn sellers were just not wanting to be the sucker that sold at the bottom. I can’t blame them… after all, I wanted out for the same reason! Anyway, when my order finally filled, a few minutes later it broke way down for what could have been a 50+ cent gain. Oh well, 4 cents doesn’t sound like much, but I assure you it was enough shares to be meaningful $.

Stocks Mentioned In This Article
Stock	Links
CHB	| |
HANS	| |

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

I took three trades today: 1 daytrade and two NR7 swings from my watchlist. The whole HANS saga unfolded in real time on Wallstreak. Read the rest of this entry »

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

I took a swing trade in HANS last friday. I’ve held it for almost a week, but it felt more like a year.

(UPDATE: Inserted a properly linked image below)

1. Why did I take this trade?

I bought Hansen Natural Corp (HANS) @37.14. The reason I bought it was due to several factors: Nearby support @36.75 was established, HANS was in a short term trading range as indicated by the two blue bars in the chart. I had reason to believe that there was a high probability that it would at least tag the 38 level again. This was my initial thesis for the trade, anything else (like a true breakout above 38.5) would have been a bonus.

2. What was the initial stop?

Initial stop was just below support @36.74. Because it was originally in a trading range, there was no need to move up the stops, ie. the next stop loss level would have been 38.20-ish.

3. Why did you exit where you did?

The HCPG newsletter highlighted the fact that HANS tried to break above 38.40 and failed. I had already noted that the 38.25-38.30-ish level was a key decision point. Well, that breakout failure was the biggest warning sign for me to get out.

4. Is there anything you would do differently?

With swing trading, there is always a trade off between how much profits are you willing to give up in order to realize even more profits. I could have sold as soon as it tagged 38, but there was always the potential that HANS could have a real breakout.
When HANS failed to break above 38.40 yesterday, I later realized that it formed a triple top. Had I realized this earlier and focused more on the 38.3-38.4 level, I could have sold sooner and lock in more profits.

Note that the story on HANS is not over by any means, and I will be watching it for another swing trade opportunity.

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

If you look at the 30-min bars of Hansen Natural Corporation, it’s going straight up.

… so the only way to find an entry without waiting is to drill down some. On the 1-min charts (ok, make that drill down a lot) I thought the setup under 35 was decent. It topped out around 34.97 twice, with higher lows after the second attempt. I decided to buy in as it leaped across 35 with rising volume. I got filled at 35.03. Then… nothing. It kept dropping to 35.02, then rising to 35.04. 35.02, 35.07, 35.02. Plus, the volume was drying up. When it hit 35.07, with the overall markets so flat and choppy, I said “enough! I’ll take a couple cents of profit and be done with it.” I issued my order, and the bid immediately dropped to 35.03, where I was filled. So, I had an exactly b/e trade (minus commissions, of course). Here’s the 1-min chart:

You can see that the stock did eventually find its way out of that channel and go higher. I could have gotten 1R out of it 20 minutes later. But, as I type this, the market indices have all slipped into negative territory, and they are choppy as ever. Here’s the 10-min QQQQ chart so far:

… so, while it’s not crystal clear, I think I made the right choice for my style of trading. One thing I could have done better, maybe, is buy in at 34.98, rather than wait for the push through 35. I’d have to keep my finger on the “sell” button until it made it over 35, of course. I might have had to break even and try again to get the actual break. But, if I had done that, I might have stuck around while it sat there at 35.02… or at least I would have been able to cover commissions on the exit. Something to think about. I go back and forth on whether to wait for round numbers, or not.

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

I’ve been reading a bunch on volume/price analysis lately, and I’ve started watching constant volume candle charts as well as regular time-discretized charts. A volume candle is completed after a certain number of shares trades, while a standard time candle is finished after a certain amount of time passes. On a constant volume basis it’s easier for me to see the buying and selling pressure acting on the price. Based on a volume candle chart, I went short Hansen Natural Corp. (Nasdaq: HANS) yesterday. Here’s the volume chart (200,000 shares/candle):

and the standard chart (30 min.):

I used a Fibonacci retracement on the 30 min. chart for the price target ($27.50, the opening range low), but I used the volume chart for my entry. Looking at the 30 min. chart, there’s not much of a setup to my eyes, but the volume chart clearly shows the price making a lower high around 10:54 am, revealing that selling pressure was larger than buying pressure. When price failed to make a new high, I entered at the green line ($28.64), with a stop at the red line ($29.23). The stop was above the lower high which was my trade catalyst–if this proved wrong, then my whole read of the trade was wrong. The trade quickly moved in my favor, so it was proved correct immediately (Thanks to the Phantom of the Pits, like Zoomie has said).

I had to be away from my computer in the afternoon, so I tightened the stop and got shaken out at $28.31 for a 0.5R gain. It never made it back to the opening low, but if held until end of day it would have been about 1.1R. Finally a win! Great kid–don’t get cocky! (and don’t quit your day job…)

Stocks Mentioned In This Article
Stock	Links
HANS	| |

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

Being a mostly up day, my mostly short watchlist tends to suffer. I’ve been attempting to put more long options on it, so that I’m equally ready no matter what happens.

Today, Hansen Natural Corporation (Nasdaq: HANS) dropped through my 41.8 entry in the opening minutes. I didn’t take that trade, as I don’t chase opening volatility. It promptly turned around and made a valiant attempt to fill its gap:

I did have one watchlist success, though. Later in the day, Terex Corp. (NYSE: TEX) ran a little past my 45ish long entry point, and then fell and bounced off it again. That’s always a very good sign. I wasn’t at my desk at the time, so I missed the trade. I got the alert on my blackberry, but all I could do is verify that it wasn’t running fast right after it hit 45. By the time I checked again, it was too late. If I were at my screen, I would have gotten in above the black line. That’s the point where it showed me it can run higher than its initial push through 45.

I am proud to report that I have several StockTickr friends now, thanks primarily to my interview there, I think. So, I hope if you are following along with my watchlist that you got in on TEX and made some money. I am user idempotent there if you want to befriend me, as well. Of course, just like everything I do, that list is for informational purposes only, and is not to be considered investment advice.

See you tomorrow!

Stocks Mentioned In This Article
Stock	Links
HANS	| |
TEX	| |

Just a short note: I was feeling sick today, so I traded in demo mode, and only for part of the day. The sad part is, had I traded my real account, this would have been a good day. In fact, in terms of my goal of holding onto stocks, it would have been just about a perfect day. Go figure…

As I expected, I got some follow through on Qwest Communications (NYSE: Q) today, just buying at the open and holding till I stopped trading. I also went long on Hansen Natural Corp. (Nasdaq: HANS) at the break of its opening range @ 45.50, and held until 46.50. See how clearly it set up under 45.50 on the 15 minute chart before pushing through (sorry, no sloppy annotations today)?

… the only thing I didn’t like was how wide those three candles were… a lot of times, since I’ll use such a tight stop on entry, I get shaken out of these trades. But in this case, it tapped 45.50 again around 12:30 and then didn’t look back for a couple hours.

Stocks Mentioned In This Article
Stock	Links
Q	| |
HANS	| |