Whew! I was very sleepy today. I was even seeing secret messages in my trade-ideas alerts! It didn’t help that the markets were pretty quiet and choppy all day, which lured me into 10 trades. 7 of them were winners, though most of the winners were small. In the video, I go over the 3 losses, since there’s no way I could fit all 10 trades into 10 minutes.

I don’t know if the hidden messages will show up clearly in the video, so here are the screenshots:

Clearly, trade-ideas became self-aware and was trying to tell me when Chinese Democracy would be released. “When Axl Rose has ‘lncr’, rock.”

Shortly after that, I may have gotten a clue that it was actually a human hacking into the system and sending me the messages:

So, “I’m in the WSO”, eh? I bet it’s “Wichita Symphony Orchestra,” but I’m not sure…

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

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

I was busy all morning, but I got time to trade just before the Fed released their statement. I saw CFC taking a dive, and tried to scalp the action. My first entry was short at the bottom of a swing, and I was quickly out for a loss. Determined to keep swinging, I tried again to go short. This time the entry was good, but I didn’t partial out when I should have, and scratched the trade. Since trade #2 wasn’t a loss (2 strikes in the same stock and I’m out of it for the day) I tried again, this time looking long. My entry was terrific: I sent a market order to buy just as I saw price fall back from round number $27 and got filled at $26.90. CFC then snapped back to $27 and began battling it out, doing lots of volume a little above $27. This gave me an immediate cushion on the trade, and it ended up great, offsetting the loss from my first trade by about 2x. Here’s the chart:

Trade Summary:

CFC Short
Entry: $26.89, Stop: $27.08, Target: $26.50
Exit: $27.12, P/L: -1.20R

Trade Grade:

Trade Summary:

CFC Short
Entry: $26.96, Stop: $27.15, Target: $26.60
Exit: $26.92, P/L: 0.16R

Trade Grade:

Trade Summary:

CFC Long
Entry: $26.90, Stop: $26.80, Target: $27.50
Exit: $27.26, P/L: 4.34R

Trade Grade:

Wallstreak user Johnson also pointed out a beautiful base forming in JNPR, right at round number $33. I set an alert to tell me when it broke out. I held a very tight (for me) stop of S0.10, and it paid off very well. I traded off the 1 minute chart, though the 15 minute shows the base better, and I watched it for confirmation of the price and volume action I saw on the 1 minute. That’s kind of backwards to how I usually think (the higher timeframe guiding the lower instead of the other way around), but it worked out well and kept me confident to hold even though the 1 min looked scary at times.

Trade Summary:

JNPR Long
Entry: $33.09, Stop: $32.90, Target: $33.50
Exit: $33.59, P/L: 2.08R

Trade Grade:

I’m on a tear lately, and it’s a function of three things:

1) Good luck (I admit–I’ve gotten a few good breaks recently)

2) Freedom to trade at will from my Prop firm

3) An increase in my skills from my own experience as well as excellent mentoring from the exceptional traders on Wallstreak.

My prop account is up 10% since 7/25/07. That’s not only the best performance in two weeks I’ve ever had, it’s also the highest my trading gains have ever been. I’m finally making money by trading. Still, pride goeth before the fall, so I’m trying to be very cautious to avoid mistakes and not think I’m ‘home free’.

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

Hi all. I got bored mid-day, and decided to go ahead and blog my four morning trades. Will there be any afternoon trades? I don’t know. We’ll see how the markets act after the fed announcement. I had same nice gains today, and will need a pretty convincing setup before I put that at risk.

The trades were on FMCN (1 win 1 loss that cancelled out), URBN (nice sized win), and FNM (nice sized win).

[Edit: I made one more trade after the FED announcement. I (along with most others I know) was looking for stocks to pop up, so of course they fell down. Eventually there was a reversal back to the upside, but by then I was non-plussed. I don't have the temperament to play in a wild news environment. I took JNPR for 9 cents on a nice safe-looking ascending triangle, and called it a day. So, 5 trades today; 4 wins and 1 loss; very profitable day due to large position sizes on my winners.]

Johnson on wallstreak pointed out JNPR. Thanks, man! Here’s the PnF chart covering the last two days. See how there’s a wall at 33.00 practically all day, and that if you squint enough you can imagine a triangle covering most of the day?

Now, here’s a 3-minute chart of the last 2 hours before the breakout. See how there’s another ascending triangle inside the bigger triangle from the PnF chart? There’s that fractal price action again!

Anyway, based on the small triangle a conservative price target would be about 20 cents. I just went for 10, because I really don’t trust the post-fed environment. I still made twice my risk, since I was using a 5-cent stop. I note that others that caught most of the 70 cent move also made about twice their risk… so you see, while my style is not as sexy, I often make similar $$$ in less time. Lots of ways to skin the market… do what makes you comfortable!

I adjusted my “mean reversal” paintbars again this morning, and they are looking better than ever. The code for these painbars is a mile long! I added two criteria that eliminate the two biggest causes for false positives I’ve noted so far. Actually, it’s the same number of paintbars, but I’m slowly trying to turn all the questionable cases grey. I want there to be high confidence in the blue and red/green varieties, and only passing interest in the grey ones.

Watch this post's video on Youtube

Zoomie took two small losses today. It was a choppy, unforgiving environment out there!

Juniper (Nasdaq: JNPR):

Coach Inc (NYSE: COH):

Stocks Mentioned In This Article
Stock	Links
JNPR	| |
COH	| |

I was away from my desk for most of the day today, and I didn’t really like most of what I saw. Yesterday, just about every stock I saw looked tradeable. Today, none did. I bit on Juniper (Nasdaq: JNPR) making new highs. Just like yesterday, the TICK’s immediately went against me, and the breakout failed. I mean, immediately after my order filled. It’s uncanny. Anyway, I decided last night that it’s not the right market to hold onto stalled trades. So, for the forseeable future, either a trade has an initial pop that works right away, or I’m getting out half.

So, that’s what I did… I got out half at breakeven. I then had to leave for a few hours, so I put a stop in the market and left. While out, I was stopped out for the other half (so, -0.5 R), but before that, the darn thing reached about my 1R profit point. It’s another case of a stock rising rising, and then falling sharply. Seeing a lot of that! I’m certain that I would have salvaged at least 0.5R had I been around, and that’s assuming that I wouldn’t have caved and taken my 1R when I had it.

So, I finally picked a trade that turned out to be a winner, and I lost money on it! What an unlucky week I’ve had…

At the end of the day, I was watching the markets, and was eyeing Slumberger (NYSE: SLB) for a long breakout. But, it waited until the last 15 minutes of trading to move. I couldn’t make myself jump in that late, though I have noticed in many recent trading sessions that buying pressure has been high right at the close. So, I missed out on some profit there.

Stocks Mentioned In This Article
Stock	Links
JNPR	| |
SLB	| |