Thursday, June 7, 2012

One from Column A, One from Column B

    A week or two ago BC Lund put out a post about using all at your disposal to trade better. He spoke about using the efforts of others on the stream to help with idea generation for finding trades. When I read that I found myself saying out load YES! There are sooo many ways of skinning the cat, one person can't possibly scan, monitor, filter & watch everything that is out there. I never felt that way until about 7 months ago I found DTBC and the Goat. That alone has made a monumental difference as to how I look at daytrading, and I have been trading a loong time. A while after that I began to look at Ichmoku charts. It was from following NoDoji and Newsagg that I became interested in a totally new way of charting.
    Now I am not advocating simply following ANY TRADER out there. I am advocating taking bits and pieces of what you can learn from successful people who are out there sharing and helping, putting it into your own metallurgist pot and createing your own gold. Once you have criteria that works for you, create your own trading plan. Again, your OWN plan. Write it down, backtest it, kick it, scratch it, grind up it and punish it. Find its faults. And then when you’re ready, put it to work, trade it with paper or trade it small (I recommend trading it small, very small as the emotions come out when your cash is on the line in a way that doesn't happen when you paper trade).
   Below is a chart of PCLN and with it is how I incorporated the help of others into a few good trades today. This isn't to toot my horn as I make just as many losing trades as the next guy, maybe more (and I post them too). I put it here to bring to maybe bring to light some ideas about trading, and to pay homage to the ones who have helped me see that light.

So, the market opens strong today and after yesterdays big move, I'm feeling like a bit of a pullback is likely somewhere. Truthfully I was thinking around 11AM, but in one of the rooms that I frequent, The Goat of DTBC was aggressively shorting AAPL & SPY early. I was long AAPL at the time. It is not a rare event that we are on opposite sides of AAPL as I'm in and out of it all day and Goat trades it frequently too. It is rare that I don't pay a little closer attention to it when we do differ on direction though. So with that in mind I tightened up my stop and watched. I was long calls and when it broke my stop I shorted stock which turned the calls into puts (if you don't understand that concept, hit me up and I will do a post on that). And with that in place I began to look around for another trade. I had gotten beat up a little in PCLN yesterday and I owed it one so since it was up over 10 this morning but weakening it caught my eye. As it took out the opening range low of 651.97 I tried to short it but missed. I waited for a little bounce but I couldn't get a sale off so I ended up hitting the bid at 650.00 (#1 on the chart) as the market continued to weaken. It dropped below my entry initially but didn't hit 648.01 where I was bidding for 1/2 my short to get a cushion. I placed my stop above 653.00 and waited. The 5 minute cloud was way below at 638 and offered nothing but a "That would be nice thought in my head". The market began to sell harder so I cancelled my bid and lowered it to 545.01. I'm usually not lucky, I usually cancel my bid, it trades through where I was bidding and then takes off. Then I kick my dog ( just kidding, I love her and wouldn't hurt a hair on her head). This time I’m right and I get filled at 545.01 (#2). Now the cloud isn't that remote of a possibility! Hmmm. The cloud had risen to 639.95, not out of the question, so I entered a cover order for the balance of my position at 640.01(#3). And after a bounce from that level where it actually traded at 640.00 without filling me, I was filled on the next spike down. The cloud held there and an interesting thing happened. As the stock rallied, the cloud twisted and remerged up at 645.50. Ok, I entered an order to reshort at 645.49(#4) and after a few minutes I was short again. A 2 point drop had me cover 1/2(#5) and another 1.5 drop had me out (#6).

The point of this isn't anything other than to illustrate that there are great ideas out there. It was the Goats ideas that had me selling my longs and hunting for a short. It was NoDoji's and Newsaggs ideas that caused me to learn Ichimoku which gave me a great spot to cover and reshort. And lastly it was me who put the time in to test out the Goats ideas, the validity of Ichimoku, and put MY OWN PLAN into effect.
So, join a room, learn something new, create your plan, trade YOUR plan!!
 Oh, and don't blog during market hours. Look at # 7 I should've been selling short again at the cloud touch at 646 and then taking profits as it dropped to 641, but I was writing this LOL, well you can't be in them all! Trade Well!

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