tag:blogger.com,1999:blog-35222648255711886632024-02-22T01:42:53.238-08:00Trader RickDeveloping Consistent Automated StrategiesRickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.comBlogger114125tag:blogger.com,1999:blog-3522264825571188663.post-87824019355079228792018-03-14T16:10:00.000-07:002018-03-14T16:10:08.432-07:00Scottrade to TD Ameritrade transition The last month has been stressful trying to learn a completely new platform (Thinkorswim) now that the merger of Scottrade with TD Ameritrade is complete. I traded this H Pattern that I learned from Trader Jamie. My psychology and management was very good, I was happy with how I traded this. 3.3R booked.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtL8qnBbEvxCllhlawaZyiW_Nbi1C7hM8z8sPXpbj-rTvSX3hjrP0SEkogggacEsuR0Z6W8qhwVMUwHmc1l9_NiufltUcoYvwrHc8QnhkMIcWY57q104bywSvq74XSuZn2H45vt9izHZQ/s1600/sds-031418.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="444" data-original-width="1587" height="179" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtL8qnBbEvxCllhlawaZyiW_Nbi1C7hM8z8sPXpbj-rTvSX3hjrP0SEkogggacEsuR0Z6W8qhwVMUwHmc1l9_NiufltUcoYvwrHc8QnhkMIcWY57q104bywSvq74XSuZn2H45vt9izHZQ/s640/sds-031418.jpg" width="640" /></a></div>
<br />Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-10178473975815860932018-02-05T13:40:00.001-08:002018-02-05T16:19:03.166-08:00Big down day (flash crash?)Well, that was interesting--reminiscent of 2008-9. I traded a Gap Fill Reversal. I got stopped out with a retrace when the Dow had a technial bounce off the first test of 25000 and might have been a little aggressive tightening my stop, but little did I know we would have a rare epic down day. It was a 2.88R trade, so I can't kick myself that it could have been a 13R trade.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTzYZkyRetvlb1WIdqfswf2OO2VrZQt6GcA2hKbx40gLzRVY303Dt5JY1XN9I8urDf6xzWmmr1OUB6p37_jXPPfdDGVnbAhdJ9uPpmMc_WXN9GuJQyYr63oOouy5pd4o2dgl69GkAhFtA/s1600/sds-2-5-18.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="717" data-original-width="627" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTzYZkyRetvlb1WIdqfswf2OO2VrZQt6GcA2hKbx40gLzRVY303Dt5JY1XN9I8urDf6xzWmmr1OUB6p37_jXPPfdDGVnbAhdJ9uPpmMc_WXN9GuJQyYr63oOouy5pd4o2dgl69GkAhFtA/s640/sds-2-5-18.png" width="558" /></a></div>
<br />Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-3883893233838351782012-02-21T11:57:00.000-08:002012-02-21T12:01:20.911-08:00Inverse correlation between oil and S&P returning?I'm on the lookout for the inverse correlation between oil prices and the overall market like we used to see several years ago to make a comeback. I think that oil is hitting the point where it will affect the spending behavior of the average consumer and reduce demand for consumer goods instead of signaling healthy demand like it has over the past few years.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com1tag:blogger.com,1999:blog-3522264825571188663.post-67751934107686019292011-08-04T10:56:00.000-07:002011-08-04T11:13:34.631-07:00New Look at R Multiples and Partial Profit TakingThis post will require a familiarity with R Multiples (Van Tharp's idea). I did a study on partial profit taking as my timeframe changed from intraday to swing trading. I know that Van Tharp doesn't believe in partialling out of trades, but there are psychological benefits in my opinion. My swing trading exit strategy is to partial out 75% of my position at 1.5R and let the rest go to at least 4R. When you are only holding 25% of your original position, you have the freedom to let it ride and feel less temptation to exit early. Holding overnight becomes less harrowing when you are only holding 25%.<br /><br />To use this spreadsheet, you should have an idea of the probability of your first and second targets getting hit. If you don't have data, you can guesstimate or paper trade until you have enough data to determine how accurate your entries are.<br /><br /><a href="https://spreadsheets.google.com/spreadsheet/ccc?key=0AicC1UrMfnSqdFhlMTVaYVpmWkJHTlg3RjIxNjg3VXc&hl=en_US">https://spreadsheets.google.com/spreadsheet/ccc?key=0AicC1UrMfnSqdFhlMTVaYVpmWkJHTlg3RjIxNjg3VXc&hl=en_US</a>Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-37109768628193626962011-05-13T10:45:00.000-07:002011-05-13T10:49:32.221-07:00XLF - descending triangle<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid-PV_y7PHMzLlBpCQgi8OI8EzZYJDMGppc-wwaoH1bfR5SftiEfeuOfgTazoSUqZC_b5EKqpIgIGo2fTulxLJgwHJOdmMfyaJXwDCvzGxUroyrJxM8wZt5iLJHblM-Lsn-N1xxs75-3Y/s1600/desc+triangle.bmp"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 318px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid-PV_y7PHMzLlBpCQgi8OI8EzZYJDMGppc-wwaoH1bfR5SftiEfeuOfgTazoSUqZC_b5EKqpIgIGo2fTulxLJgwHJOdmMfyaJXwDCvzGxUroyrJxM8wZt5iLJHblM-Lsn-N1xxs75-3Y/s400/desc+triangle.bmp" alt="" id="BLOGGER_PHOTO_ID_5606259209212788178" border="0" /></a><br />I can't think of many reasons to be long here. XLF is setting up a descending triangle, there is the H&S setup in XLE, the dollar is getting a dead cat bounce or maybe more, the "sell in May" effect, end of QE2 approaching... It's very difficult for markets to rally without financials participating.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-80728114721637416652011-04-22T17:14:00.000-07:002011-04-22T17:19:26.074-07:00Volatility Based Position Sizing and Choppiness Index easy language codeI don't really pay much attention to this little blog anymore but I've noticed looking at the stats that two of my most popular posts deal with volatility based position sizing and Bill Dreiss's choppiness index. So in the spirit of open source, I'm releasing my code here. Hopefully it is helpful to someone out there.<br /><br /><br />Inputs: InvestmentCapital (70000),<br /> PercentRisk(.2),<br /> MaxPercentAllocation(50),<br /> StopFactor(.025), {volatility based stop}<br /> ProfitFactor(3);<br /><br />Variables: DollarRisk(0), NumShares(0), Vx(0), timeofentry(0);<br />Variables: HMax(0), LMax(0), Period(14), Choppiness(0);<br /><br />DollarRisk = InvestmentCapital*PercentRisk/100;<br />Vx = SquareRoot(AvgTrueRange(50));<br /><br />NumShares = DollarRisk/(Close[0]*Vx*StopFactor);<br />SetStopShare;<br />SetStopLoss(Close[0]*Vx*StopFactor);<br />If ProfitFactor > 0 then Begin<br /> SetStopShare;<br /> SetProfitTarget(AbsValue(Close[0]*Vx*StopFactor*ProfitFactor));<br />End;<br /><br />If NumShares*Close[0] > MaxPercentAllocation/100*InvestmentCapital then Begin<br /> NumShares = 0;<br />End;<br /><br />NumShares = Round(NumShares, 0);<br /><br />HMax = MaxList(Highest(Close[1], Period));<br />LMax = MinList(Lowest(Close[1], Period));<br />If Hmax = Lmax then Hmax=Hmax+.00001;<br />Choppiness = 100.0 * Log(Summation(TrueRange,Period)/(HMax -LMax)) / Log(Period);Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-91669937124538738632010-12-31T08:44:00.000-08:002010-12-31T08:46:53.482-08:00Japan - deflation<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxIHyT0nmekAGWjcODQEyDWKXuOiK1JRNJvvSwgEntUz0qDKCKA0hDlLqMDAnRqpbxbmcpsiru_cnauOPancTr0ls_FhGiwH6f2s2UAYxHj0nY_zbl0uYRTt4eqXaDNzPZd6yj2O01wuE/s1600/japan+inflation+%252B+interest.jpg"><img style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 400px; height: 387px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxIHyT0nmekAGWjcODQEyDWKXuOiK1JRNJvvSwgEntUz0qDKCKA0hDlLqMDAnRqpbxbmcpsiru_cnauOPancTr0ls_FhGiwH6f2s2UAYxHj0nY_zbl0uYRTt4eqXaDNzPZd6yj2O01wuE/s400/japan+inflation+%252B+interest.jpg" alt="" id="BLOGGER_PHOTO_ID_5556888555603444322" border="0" /></a>I'll let you draw your own conclusions and parallels to Quantitative Easing in the U.S.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-3823583942320443782010-02-24T10:37:00.000-08:002010-02-24T10:50:43.518-08:00Importance of developing complimentary systemsDeveloping systems that work well in a trending market is not very challenging. But as they say, the market only trends about 30% of the time. Finding a system that works well in a low volatility, trendless market is more difficult, and that's what I've been searching for the last 6 months. I've now found something that works decently. There is little to no overlap between my trending and choppy system, so when one system is active, the other is inactive. When one system has a good month, the other tends to have less trades and lesser performance. The end result is a much smoother equity curve.<br /><br /><div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY-LgjfPEL2d8IBhclCKA4E75SyaQTX8eRe_OKg6fPMfNurVI0lpabe4zYRATEUBrLS1-g4gXoq6MSZHT8jOaDhyS7lxqpF2w2CwPeW51J-I8Jf5ePC9VOZVtfhMgOeLGfd82GGn91Z2c/s1600-h/two+systems.png"><img style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 400px; height: 232px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY-LgjfPEL2d8IBhclCKA4E75SyaQTX8eRe_OKg6fPMfNurVI0lpabe4zYRATEUBrLS1-g4gXoq6MSZHT8jOaDhyS7lxqpF2w2CwPeW51J-I8Jf5ePC9VOZVtfhMgOeLGfd82GGn91Z2c/s400/two+systems.png" alt="" id="BLOGGER_PHOTO_ID_5441883713238159602" border="0" /></a>Monthly performance of trending and choppy systems<br /><br /></div><br /><div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGa02CZCqxeeCoAgt_F0LNzavVpBldgEUp149l6hpboX2QueiftLfiJeTAKVkl1VcG_0eCB-1XG6bQ6CzGdPol0U_yu2oz_rfIzJ0MDcZbBpjbyJLt3SKbfUnL0jSDdvTv046wGUJ-jWU/s1600-h/combined+-+equity+curve.png"><img style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 400px; height: 265px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGa02CZCqxeeCoAgt_F0LNzavVpBldgEUp149l6hpboX2QueiftLfiJeTAKVkl1VcG_0eCB-1XG6bQ6CzGdPol0U_yu2oz_rfIzJ0MDcZbBpjbyJLt3SKbfUnL0jSDdvTv046wGUJ-jWU/s400/combined+-+equity+curve.png" alt="" id="BLOGGER_PHOTO_ID_5441884036612016626" border="0" /></a>Combined equity curve<br /></div>Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-42964634149252998902010-02-02T07:46:00.000-08:002010-02-02T07:53:59.449-08:00TSL - Bear FlagI'm personally not trading individual equities but I couldn't help but notice the solar stocks setting up for a possible continuation move down. See also STP for a nice symmetrical triangle. FSLR could easily move to 100.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwkStn1dSlIYiDf1bfIY2DeDITFYO455isUAtvVTKj0bW2yaMMYdB6AsPwWjyVQUjDECFsNInwoqVlbUuDx3gVD7sahXWHVrz7H21Piluppc76qEkW4R6oQAPpKJwUeyVd6WAOa1-Zn2Y/s1600-h/tsl.png"><img style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 400px; height: 303px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwkStn1dSlIYiDf1bfIY2DeDITFYO455isUAtvVTKj0bW2yaMMYdB6AsPwWjyVQUjDECFsNInwoqVlbUuDx3gVD7sahXWHVrz7H21Piluppc76qEkW4R6oQAPpKJwUeyVd6WAOa1-Zn2Y/s400/tsl.png" alt="" id="BLOGGER_PHOTO_ID_5433674403102297522" border="0" /></a>Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-75708357598600240962009-11-12T19:52:00.001-08:002009-11-12T19:58:28.253-08:00Something is brewing<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcuH2s88j49HXx30U4ZWDZ27q33PewFCx0SVW779a8PBFmt3YmIGDEmYxZy-H7huA9zLprETx_yoOkVMpyF3jjigZ6kk3xluXA3kjAoMJ_SN9sxfk5B8olR1QYq5DIsjzbiMyAuUYFS1E/s1600-h/dollar.png"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 382px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcuH2s88j49HXx30U4ZWDZ27q33PewFCx0SVW779a8PBFmt3YmIGDEmYxZy-H7huA9zLprETx_yoOkVMpyF3jjigZ6kk3xluXA3kjAoMJ_SN9sxfk5B8olR1QYq5DIsjzbiMyAuUYFS1E/s400/dollar.png" alt="" id="BLOGGER_PHOTO_ID_5403431290976393778" border="0" /></a>Check out the huge volume coming in to UUP several days ago. Looks like the dollar is double bottoming while the S&P could be double topping. Check out $USD also.<br /><br />As a side note my automated trading systems are forward testing perfectly. I would be trading them today if my broker wasn't being a pain in the neck about not giving me a pattern day trading account. But I'm pursuing some other interests and shooting a video of an idea I have to pitch to a local company. So that's my life in a nutshell.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-81079232997338435422009-09-02T18:54:00.000-07:002009-09-02T18:58:47.572-07:00Choppiness Index vs. ADXI just wanted to mention that in my testing I have found Bill Dreiss's Choppiness Index to be far superior to ADX. ADX is supposed to measure the strength of a trend, but the CI does more by telling you how orderly price is moving using fractal geometry. I just started live trading small positions this month with an automated strategy. Hopefully the volatility will start to pick up a bit as traders come back from vacation.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com4tag:blogger.com,1999:blog-3522264825571188663.post-76589062095731625852009-07-16T11:18:00.000-07:002009-09-02T18:54:28.471-07:00Volatility Based Position SizingI just finished coding a volatility based position sizing algorithm and the results are pretty dramatic. My hypothesis was that it would transform my system's equity curve into more of a straight line and that's exactly what it did, smoothing the results over time. When conditions are more volatile a wider stop is used and less shares are purchased. Less volatile means a tighter stop and more shares, so smaller moves are capitalized on.<br /><br />If anybody is interested in seeing the code I can post it with the disclaimer that it hasn't been tested in live trading.<br /><br /><div style="text-align: right;"><div style="text-align: center;"><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkYP-LYxIf3iFEMx0CBw-1NVSiZFyeAcX_9221D4hq9DlludShf84I-Wh8VNCJ-EZLG3-8hPlLA-ASoTR7lOM-dNfGlJPfJqeOsw0TPv6a1Ca-dTa_StnijYHvWIM6JSTill1l-gTMr-g/s1600-h/spy-equity2.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 223px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkYP-LYxIf3iFEMx0CBw-1NVSiZFyeAcX_9221D4hq9DlludShf84I-Wh8VNCJ-EZLG3-8hPlLA-ASoTR7lOM-dNfGlJPfJqeOsw0TPv6a1Ca-dTa_StnijYHvWIM6JSTill1l-gTMr-g/s400/spy-equity2.bmp" alt="" id="BLOGGER_PHOTO_ID_5359125325757362994" border="0" /></a>Before Position Sizing with Static Stops<br /></div><div style="text-align: center;"><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-eC4z6I7kFXQ_aUwO4JNRoG-lHC_g5GCwi1IDZixduvkaV2IbntXZtwFG_mFF9YHRL68SUhsmtdWCeV6Qx6tHyiU8xU_MuWXhpZTKKkqogXOf3OJb-eZJH-e0wx0YPMYBbexofH1J0iA/s1600-h/spy-equity3-possizing.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 231px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-eC4z6I7kFXQ_aUwO4JNRoG-lHC_g5GCwi1IDZixduvkaV2IbntXZtwFG_mFF9YHRL68SUhsmtdWCeV6Qx6tHyiU8xU_MuWXhpZTKKkqogXOf3OJb-eZJH-e0wx0YPMYBbexofH1J0iA/s400/spy-equity3-possizing.bmp" alt="" id="BLOGGER_PHOTO_ID_5359125636774399298" border="0" /></a>After Position Sizing with Dynamic Stops<br /><br /></div></div>Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-47259296577693921802009-07-09T10:31:00.000-07:002009-07-09T11:09:42.328-07:00New direction for this blogFor those who may have been following this blog for a while, I want to let you know that this blog will be taking a different direction. If you are mainly interested in seeing examples of discretionary trading, than there are several excellent traders that I link to over at the left column. I was discretionary trading for the last year and a half to get familiar with the markets. I am now embarking on the second phase of my trading career. Discretionary trading taught me a lot about myself. If you don't think you are emotional, try trading for a while. I had some good months, but I realize that the biggest obstacle to my success is myself. I believe that to really become a good trader you must enjoy the challenge of trading and have extreme mental toughness. Watch Tiger Woods play golf and you will see that he is intensely competitive and always believes that he is able to win, even after some bad shots. As a trader you have to be able to shake off some bad trades and not get into a negative feedback loop. It is difficult to "keep the faith" after a drawdown period no matter how many psychology books you have read. My advice to those looking to discretionary trade is make sure you love what you're doing.<br /><br />If you're still reading than you probably have an interest in automated trading. I've been using Tradestation for about a week and have already developed some simple algorithms that outperform my own trading record, so the results are encouraging. I don't think I will be sharing the specifics of my strategies out of fear that Golman Sachs reads my blog and starts frontrunning my orders :) My approach to developing automated strategies is to keep it simple and general. I think if you get too specific, you end up with something that works great for a short period of time and then stops working. If I look at the trades my systems make, I can see examples of how people trade, like that's a narrow range bar at the ORH, or that's a pullback to a 50% fibonacci retracement. But I'm not searching for those setups specifically. If you keep your strategies general, you cast a wider net. There is always the temptation to overoptimize. If my algorithms start performing at an 80% win rate, I get suspicious. I look for a profit factor around 2.0 and a win rate around 60-70%. Anything higher seems suspect. I backtest over several years but weigh the last two more highly. I test on SPY mainly, but I may be getting into currency trading as a backup market. Right now there is too much correlation though, so the benefit of diversification really isn't there.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com5tag:blogger.com,1999:blog-3522264825571188663.post-4114301562477463722009-06-09T09:29:00.001-07:002009-06-09T09:36:45.405-07:00MOT - ascending triangle breakout<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFmgzBnUWIomw_WLC3aCHMLnayOaw__7mHRpweyKNTcguvo7MD6Ndl0NPTcvy061d27S9K1JTRWIOBxPzNJdZFuJANVxqYpEHBpNg2TYfIvvSSePo1Pj2tisBRAHzZW8rhGAQ_UrJxlkI/s1600-h/mot.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 380px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFmgzBnUWIomw_WLC3aCHMLnayOaw__7mHRpweyKNTcguvo7MD6Ndl0NPTcvy061d27S9K1JTRWIOBxPzNJdZFuJANVxqYpEHBpNg2TYfIvvSSePo1Pj2tisBRAHzZW8rhGAQ_UrJxlkI/s400/mot.bmp" alt="" id="BLOGGER_PHOTO_ID_5345367596274332962" border="0" /></a><br />I'm actually in this long term. Thought it wouldn't hurt to talk up my book. If all my readers buy MOT right now it could move the stock up .001 cents. The market's been a real snooze--not much to comment on.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com1tag:blogger.com,1999:blog-3522264825571188663.post-49390678520644721092009-05-21T08:17:00.000-07:002009-05-21T09:44:29.873-07:00Thursday trade - SU<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMpxeGd8F_6gA9Hzyllg1srAiPnkGQyIxsV3f26UkqtpzE8u9nbYyH5iweATgJsfSrKh0cO_k3lz1M_qfeE1f6vgx-I4plVxvlfxEE74mF6PFAYh4Qw8GqGhc9LYp7oRDX_rowXgIGLTk/s1600-h/su.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMpxeGd8F_6gA9Hzyllg1srAiPnkGQyIxsV3f26UkqtpzE8u9nbYyH5iweATgJsfSrKh0cO_k3lz1M_qfeE1f6vgx-I4plVxvlfxEE74mF6PFAYh4Qw8GqGhc9LYp7oRDX_rowXgIGLTk/s400/su.bmp" alt="" id="BLOGGER_PHOTO_ID_5338318970343527010" border="0" /></a><br />I was seeing a lot of good setups today--it was hard to choose. I couldn't resist these two really negative candles (almost a tweezer top) at the PDL on high volume in SU. One negative was that there was a lot of congestion between 30 and 30.5 so I was expecting it to stall at the ORL at 30.4. It did stall there but on fairly low volume, but I didn't like how much relative strength SU and USO were showing. I tightened my stop to BE plus a little extra for my efforts and got stopped out for a small .46R winner.<br /><br />Setup: 65Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-90887790478330467792009-05-20T11:13:00.000-07:002009-05-21T06:49:59.925-07:00Wednesday missed trade - MS<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzKhAhM8vzqSvroFcecmJJaxa6jcBZ5Q94P07hW2edHi4rvbI9G93IJU5nBwLk-DHRK0FT_dvCYRQcL05zLb6cJKUYr7nPWmk_j6TbmSpz36HD98aXDLp2YuZmWhyphenhyphen62DGKM3vifi4WBBQ/s1600-h/ms.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzKhAhM8vzqSvroFcecmJJaxa6jcBZ5Q94P07hW2edHi4rvbI9G93IJU5nBwLk-DHRK0FT_dvCYRQcL05zLb6cJKUYr7nPWmk_j6TbmSpz36HD98aXDLp2YuZmWhyphenhyphen62DGKM3vifi4WBBQ/s400/ms.bmp" alt="" id="BLOGGER_PHOTO_ID_5337972653946959490" border="0" /></a><br />While the rest of the market was rallying in the morning, financials were going sideways and XLF printed a series of negative candlesticks. This trade was more instinctive, I just had a feeling that if MS broke 29, it would go down for a while. I waited for a break of 29 and then entered a limit order at 29. If I put the order at 28.98, I would have been filled...Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-7309566852314804952009-05-13T12:01:00.000-07:002009-05-13T12:05:52.357-07:00Wednesday trade - POT<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7GtSsdR2_j6rsgC8ULA4QZdOrrD2jNTdoyWCiwedlyTtK7NICHCXx9pE_s_TdICzKJyVKdqgrBaHylajAT9Iw6P8omjAOnN87gSoM3t0HWU-Y3K7-QYRdmUMZt2Kq6zKa5wQEEoMWo3U/s1600-h/pot.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7GtSsdR2_j6rsgC8ULA4QZdOrrD2jNTdoyWCiwedlyTtK7NICHCXx9pE_s_TdICzKJyVKdqgrBaHylajAT9Iw6P8omjAOnN87gSoM3t0HWU-Y3K7-QYRdmUMZt2Kq6zKa5wQEEoMWo3U/s400/pot.bmp" alt="" id="BLOGGER_PHOTO_ID_5335386809955413186" border="0" /></a><br />I traded this as a bullish pennant. The setup was nice and the breakout occured on pretty strong volume. I was really on the wrong side of the market though. After entering the trade I looked at the market internals, which were awful, so I tightened my stop aggressively to 104 and got stopped out for a .45R loss. We're entering summer trade, so I'm trying to be more selective and only trade stocks that are in play.<br /><br />Setup:65Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-47266950603480726832009-05-08T11:46:00.000-07:002009-05-11T08:47:23.802-07:00Friday trade - DRYS<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhp8mMHbZuzopFtaBNGFTICIsTCVPN1atVWouN81wpZymCCkwDPQlVAtAjqUZ_Qw52OGWP9xDfq25Dw29YFxXq-IFQUPQFYc3eWIaKUQ0OOVOhQUOETfAwsumj1ZKzHRuQTb2yrzKQMF6A/s1600-h/drys.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhp8mMHbZuzopFtaBNGFTICIsTCVPN1atVWouN81wpZymCCkwDPQlVAtAjqUZ_Qw52OGWP9xDfq25Dw29YFxXq-IFQUPQFYc3eWIaKUQ0OOVOhQUOETfAwsumj1ZKzHRuQTb2yrzKQMF6A/s400/drys.bmp" alt="" id="BLOGGER_PHOTO_ID_5333534451058096658" border="0" /></a><br />DRYS was showing a lot of relative weakness today compared to the market and DSX and EGLE. It was bouncing off of 8.3 on very low volume midday. I shorted on the break of 8.3. The breakout bar was a nice WRB with high volume. I was holding out for 7.5 and kept tightening my stop. It ended up bouncing off of 7.6 with no real indication it was about to turn around so I got stopped out at 7.85 for a 1.9R trade. Lately I have been getting faked out by something I see on the tape so I didn't tape read today and I had a more relaxed state of mind.<br /><br />Setup:65<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4ykIqMjtrtvOf8LoJFgSgZhSetfVHtNbJurzotC07ZGf6bE7OTVF7jKdivmhuudSg4YRgVdHLPqJA6zGp2QL1qbamsoBi4-VvuRvHcViEw9azfZ2heKpmbdcGXwBdPgKJUgUtVRNOm1s/s1600-h/trades.bmp"><br /></a>Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-83809107422569936072009-05-04T12:47:00.000-07:002009-05-05T07:17:20.751-07:00Monday trade - ACAS<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVGBhJfcHDMvU7_42aFPVjR0yJcsTaWt1wHz-sKREv1jwAD6GuKCynEXG6i78Wj5yPCA5hduFZ7UvjAWnnMixLZlso8yN1CAMzp6EOGzgfeuADwkzmfF9wuoshDu1TBrXh-4c7nbQWGNk/s1600-h/acas.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVGBhJfcHDMvU7_42aFPVjR0yJcsTaWt1wHz-sKREv1jwAD6GuKCynEXG6i78Wj5yPCA5hduFZ7UvjAWnnMixLZlso8yN1CAMzp6EOGzgfeuADwkzmfF9wuoshDu1TBrXh-4c7nbQWGNk/s400/acas.bmp" alt="" id="BLOGGER_PHOTO_ID_5332061972474729106" border="0" /></a><br />I was planning to trade this as an OR breakout. My broker won't let me place stop orders within 10 cents of the ask price, so on low priced stocks I have to use limit orders and enter manually. I jumped the gun on this one when I saw some strength in the tape and entered early. It ended up breaking 4.25 in the afternoon after I had scratched the trade for a small .33R loss. Today's action felt very fishy as financials were the primary mover. There was a noticeable lack of herding. But I was on the right side of the market, in the right sector so I'm patting myself on the back for going with the flow and not trying to stubbornly short today.<br /><br />Setup:60Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-77706485360211104172009-04-28T12:40:00.000-07:002009-04-28T15:48:43.936-07:00TLT breakdown<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFsyUsGlZlvkjQhyphenhyphenoKwfQSjn5wv4xjKGWkvvtKoDcASvFoWWcjC6aBjHzhtuF3mTk5qgmWj6BgbnX6KueEoB8NdxlFli5igzPO6JUKvgJI1adWqj7ypgyE11zumiisHOSv5j2fzZ8M7Is/s1600-h/sc.png"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 382px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFsyUsGlZlvkjQhyphenhyphenoKwfQSjn5wv4xjKGWkvvtKoDcASvFoWWcjC6aBjHzhtuF3mTk5qgmWj6BgbnX6KueEoB8NdxlFli5igzPO6JUKvgJI1adWqj7ypgyE11zumiisHOSv5j2fzZ8M7Is/s400/sc.png" alt="" id="BLOGGER_PHOTO_ID_5329877907626740946" border="0" /></a><br />The most interesting thing that happened today was TLT broke below 100. Either we've already entered slow summer trading mode or everybody is waiting on the FOMC annoucement tomorrow, but it's been like watching paint dry.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-3761923546548781122009-04-18T10:04:00.000-07:002009-04-18T11:05:24.480-07:00Discretionary vs. Automated TradingI've been neglecting this blog lately because I have started the transition to automating my trading. My long term goal has always been to develop automated trading strategies. First I needed to become familiar with the markets so I could discover firsthand what works and doesn't work. I do believe that the best automated trading will underperform the best discretionary trader in terms of win/loss ratio and expectancy. However, there is expectancy and opportunity as Van Tharp explains. If I am only able to find one or two excellent trades per day manually, and an automated system finds 10 decent trades per day, the results can be equivalent in terms of P&L. For example, 2 discretionary trades with an expectancy of 2.0 will result in 4R profit. Ten automated trades with an expectancy of .4 will also result in 4R profit. The one drawback is that the 10 trades incur a greater transaction cost in terms of commissions and slippage.<br /><br />The transition to automated trading won't occur overnight. This is going to be a lengthy process that begins with translating all of my favorite setups to code so an alert will be triggered every time something sets up. I think this alone should improve my trading because the criteria will have to be clearly defined (should reduce some impulsive trades that don't completley fit my criteria) and the universe of stocks that a scanner can monitor will be much larger than my small watchlist and unusual volume scans. I have been coding in Metatrader MQL4 and will eventually port over to Tradestation's Easy Language.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com4tag:blogger.com,1999:blog-3522264825571188663.post-69607069790531718372009-03-26T09:34:00.000-07:002009-03-26T09:41:53.152-07:00Note to self - stop fighting marketThis rally seems to be getting a little out of hand. Almost like we need a downtick rule to keep irrational exuberance in check. Speculators are profiting from stocks going up! I keep trying to stubbornly short though and am missing some of the upside moves out there. Solar stocks were on fire today. TSL and FSLR had some very nice volume. So what if it's insane, there is money to be made from extreme emotions.<br /><br />Warning: as soon as I come around to going long that usually means the market is about to nosedive.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-16649495682981340512009-03-20T11:11:00.000-07:002009-03-20T12:38:37.720-07:00Friday trade - FWLT<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLOEXfdprOmU7T-f0Xqajhn_-Yf1jMorCL6poOTBcLha1Vu5DMRs4GE7ZZ7n9foNUuq1wV43-ls2I7qxboFwsU6qwyqCkg6-WHJOHsOARNi9ozN1qOJ2SOucp52QWeUgIIPzG63VnHmAg/s1600-h/fwlt.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLOEXfdprOmU7T-f0Xqajhn_-Yf1jMorCL6poOTBcLha1Vu5DMRs4GE7ZZ7n9foNUuq1wV43-ls2I7qxboFwsU6qwyqCkg6-WHJOHsOARNi9ozN1qOJ2SOucp52QWeUgIIPzG63VnHmAg/s400/fwlt.bmp" alt="" id="BLOGGER_PHOTO_ID_5315356310422798994" border="0" /></a><br />This is the first time I've traded an h pattern. Jamie and Anarco swear by them, so I was pretty confident when I saw this pattern set up in FWLT. The target of the pattern was about 18.2, the optimistic target was 18, filling the March 23rd gap down. The breakout bar was nice but lacked volume. The move slowed during the Bernanke speech at noon, but it wasn't seeing any volume and was weak relative to the market so I held on. I exited (early in hindsight) for the following reasons for a 2.6R win:<br /><br /><li>Extreme TICK reading</li><br /><li>Quadruple OPEX day, didn't want to push it</li><br /><li>S&P was approaching 775 support level</li><br /><li>Sharp move down felt like a possible knee jerk Bernanke speech over reaction</li><br /><li>Capitulation volume at S2</li><br />Setup: 75Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com2tag:blogger.com,1999:blog-3522264825571188663.post-19557181568945019752009-03-18T11:07:00.001-07:002009-03-18T11:09:19.450-07:00Wednesday skipped trade - KBH<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhomzuohSHq4ZccbkHPjMCKkSxbg5O8WGgSSS74RrIjs9LPnsss760j9cIXVq32XTUGWXilB5zCZ-gt8uLoxbbz1wkbC-dvgjRE6TV6m1AcgURYhm-k8YludGUw73EVsvmr912_mx7fkfY/s1600-h/dhi.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhomzuohSHq4ZccbkHPjMCKkSxbg5O8WGgSSS74RrIjs9LPnsss760j9cIXVq32XTUGWXilB5zCZ-gt8uLoxbbz1wkbC-dvgjRE6TV6m1AcgURYhm-k8YludGUw73EVsvmr912_mx7fkfY/s400/dhi.bmp" alt="" id="BLOGGER_PHOTO_ID_5314591352593326546" border="0" /></a><br />I skipped this cup and handle because this was FOMC day and the market was very choppy.<br /><br />Setup: 75Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0tag:blogger.com,1999:blog-3522264825571188663.post-21468050221313334382009-03-14T08:33:00.000-07:002009-03-14T08:42:13.740-07:00Friday missed trade - KBH<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz6vZMrqQ8PWfIcJrwK2XTbewhFo05O6QtEhx-4wsVIJSn8mk-CRdM_A9NJVF3cXHvzYBRn2OIAWNbZZYDPbBdntcrA3pjQ0GIp48oHBPFnmFqrW-8fR7alqJ2aDe3xoNepHp5-4kuwLU/s1600-h/kbh+-15.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz6vZMrqQ8PWfIcJrwK2XTbewhFo05O6QtEhx-4wsVIJSn8mk-CRdM_A9NJVF3cXHvzYBRn2OIAWNbZZYDPbBdntcrA3pjQ0GIp48oHBPFnmFqrW-8fR7alqJ2aDe3xoNepHp5-4kuwLU/s400/kbh+-15.bmp" alt="" id="BLOGGER_PHOTO_ID_5313069107823464914" border="0" /></a><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnVjzeQyCbVICVOZnvoKUyyXUx2ctQ09DAJg7evBqk6u6udd70ATReZoPD2_ZyQbCTUlyTah1v-kgrv3u7v_nj-PmoHYqRX7ZGxGcK2isr4B4MLv__6ApP0pHp0QVrUlMip3QGMfT-Ps4/s1600-h/kbh+-10.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 229px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnVjzeQyCbVICVOZnvoKUyyXUx2ctQ09DAJg7evBqk6u6udd70ATReZoPD2_ZyQbCTUlyTah1v-kgrv3u7v_nj-PmoHYqRX7ZGxGcK2isr4B4MLv__6ApP0pHp0QVrUlMip3QGMfT-Ps4/s400/kbh+-10.bmp" alt="" id="BLOGGER_PHOTO_ID_5313068970045702450" border="0" /></a><br />I was looking at homebuilders on Friday because they had a very weak opening 15 minute bar. KBH had a nice run up into resistance at 11 on declining volume on the daily chart. It bounced off of 11.20 and put in a tweezer reversal on the 5 and 10 minute charts and a hanging man on the 15. Even if I had got the order in at the break of 11, KBH moved from 11 to 10.9 in about two seconds so I might not have been filled.Rickhttp://www.blogger.com/profile/01185536059022375299noreply@blogger.com0