VLO

I don’t remember why I didn’t sell VLO…. may be the following reasons:

1. It belongs to the Energy Industry
2. Its most recent top exceeded the previous top
3. I don’t feel comfortable

If I go strictly by rules, I should have sold it… because its monthly candle is down and the price was right. So, why did I pass it?

Closed out PGR

… at a loss of $45. That’s fine…. at least I anticipated that…. … somehow, somewhere in my subconscious, I know something will go wrong….. somewhere in my subconscious…. Call it intuition…..

Bollinger Bands

Two observations:

1. Stocks will not neccessarily reverse when they hit the bands/moving average.
2. Stocks tend not to reverse when they are not at the bands.

Gotta rush for work now, so decided to pen down these two observations first. See how I can use it later to help me filter failures.

Let My Intuition Take Charge

I’ve yet to find a mechanical way to filter out the wrong signals. But I know it’s somewhere in my subconscious. I felt ‘uneasy’ when I opened those losing positions. I know there is a reason for that, but I can’t really pin it down. Maybe it is because the monthly candle is up, but I can’t afford to filter out all such trades, cause that contradicts the logic behind this strategy. Anyway, the best I can ‘mechanicalize’ it is the following:

1. Look out for danger Signs (Doji/hesitation on high volume, Engulfing 10% etc, double bottom etc)
2. The MA should be sloping downwards (at least 10% below peak)
3. Stock should preferably hit strong resistance/prior support (look back 3 years)

Trying too hard

I think I am trying too hard again…. I’ve been looking at charts for the past few hours, hoping to find a way to filter the wrong signals out. I’m not the sort who likes to give up, but I know the answers will never be revealed by staring too hard. Moreover, I have too little data to analyse. Anyway, here are some possible suggestions:

1. Don’t sell if the current price is above previous month’s body
2. Don’t sell if the current price is above previous daily Zig Zag
3. Can sell if resistance (3 times) is spotted
4. Monitor weekly chart and determine if 3/4 of the recent 4 weeks are ‘positive’ weeks. (i.e. rise on lower volume and fall on higher volume)
5. Don’t sell if above MA(50)
6. Up to discretion – Danger Signs (Doji/hesitation on high volume, Engulfing 10%, Double Bottom etc)

This strategy requires a high hit rate, cause the profit/trade is pretty low.

I love Amibroker

I’ve just found out, much to my (pleasant) surprise, that Amiquote (a free quote downloading program from Amibroker) is able to download current stock trading prices from Yahoo!Finance. That means I can actually do ‘real time’ (well, as real time as offered by Yahoo!) stock screening. I can jolly well screen for candlestick patterns around 1am (1pm EST) and enter a conditional order. Then I can go on to zzzzz. This way, I won’t miss out wonderful opportunities like UA, which dropped like a rock all the way down the moment the market opens the next day, after I spotted it as a potential sell candidate.

Wow! Ain’t that bery the powderful…. THANKS AMIBROKER! I lub u man!

PGR vs SPR

Daily Chart of SPR (a losing position last month)

Daily Chart of PGR (a short position I currently hold)

Currently holds a short position for PGR, which has a chart that’s eeriely similar to the chart for SPR.

Main similarities:
1) Stocks reached resistance.
2) Stocks have been up a fair amount this month (Compare monthly charts below)

Main differences:
1) SPR has broken above resistance, although by a small amount, but the volume was above average. PGR has yet to break resistance ($20).
2) The resistance for SPR has been touched only twice prior to opening of position. The resistance for PGR is ’threatened’ 4 times without been breached.
3) PGR has a longer trading history (which makes it’s monthly moving average more reliable?)
4) PGR has a monthly moving average that is clearly trending downwards. In addition, the stock has once touched the monthly MA and bounced off, resuming its downtrend.

Monthly Chart of SPR

Monthly chart of PGR

Bears are back?

The market has been ‘behaving itself’ lately… at least for the past few days. It’s been trending downwards, mainly because of the rise in oil price and the fear of inflation. Unfortunately, I only have one position at the moment. I hope this strategy can work well.

As I’m writing this post, I’m concurrently downloading data from Yahoo!Finance for use with Amibroker, and I’ve written my own screener. Pretty excited cos I don’t have to write a full program to screen for candlesticks. Amibroker is easy to use and accepts data feeds from Yahoo!Finance and EODData, both of which are free to use. Now I can write powerful and flexible screeners myself, without having to subscribe to expensive data feeds.

I’m also pretty excited because I just subscribed to NEWSWEEK at a 77% discount. Now I don’t have to carry heavy books to read whenever I travel, and I won’t be wasting my time whenever I am on the bus.

Read my older blog

I was just reading my other blog (http://juzzmi.blogspot.com) that tracks my learning process. It was full of frustrations and regrets. I guess it was right for me to take a break then. Now I’m back with more confidence and hopefully a better understanding of what suits me. Anyway, I found this strategy that I used to use in the past for finding momentum stocks is really pretty good. I used it to buy stocks like AMZN and PCLN. The only problem with the strategy is that I gotta stay up till 4-5am in the morning to buy the option just before the market closes (cos I stay in Singapore, which has a timezone of GMT +8).

Anyway, here’s the strategy:

Look for stocks that satisfy the following criteria

1. 4 times above MA(63)
2. Doubled this year
3. Break resistance
4. Close in upper quarter

Screening for high volume movers can be done with MSN or IBD.
MSN (http://moneycentral.msn.com/investor/finder/customstocks.asp)
IBD (http://www.investors.com).

Finally: Options Expiry

Today is the options expiry date for May… finally. Time to reap (paper) profits.

I’m not extremely excited, maybe because it is just virtual trading. Anyway, like I mentioned in my previous post, I’ve finally started trading with real money again. So far, the position is doing well.

Wanted to sell spread for PENN today, but did not. If I did, I’ll probably enjoy $100/lot profit now… cos the stock went down more than $1 today. Despite the high probability that this will be a profitable position, I chose not to take the risk because the Bid-Ask difference is just ridiculous, sometimes more than $1!! That means, even if the stock did not move, I’ll lose more than $1 just by buying the spread back (for whatever reason). But PENN really has a high chance of succeed, cos I can sell June options that’s about $8 to $9 OTM and still earn a credit of more than $1 (for a $5 spread).

Before I end this post, would like to make an appeal:

Please help the victims and survivors of Myanmar Cyclone and China Earthquake. Thank you.
http://guchialeng.wordpress.com/please-help