Hi, these are just ideas not recommendations, sometimes I trade my ideas, sometimes I don’t.
Always remember, yours is the responsibility for your trades,
Good luck,
Erick



Sunday, May 20, 2018

The perks of being a short term trader


In my last post on April 25th I mentioned being long WEC because it was “accumulating”, this is what happened the following days.

WEC broke in an uptrend that took it past my 63.5 target to a close of 63.71 3 days later.  Of course I took my 1% plus profit.
Then WEC “distributed” for five more days, still plenty of time to take profits.





After that this happened with WEC stock, it went down and now is trading below my entry point. Now, being a great company, WEC will start at some time going up again, but before that, if I had not take my profits,  I would be looking for some time at losses in my brokerage account, and that is really a loss of confidence factor for a trader.




But that was then and this is now

Remember your technical analysis 101, the phases, accumulation, distribution etc., sometimes distribution is not followed by a decline, instead we thought it was distribution but really it was a new accumulation phase, well, right now for the past 4 days the market is either accumulating or distributing, who is to know?, the important thing is to react when we know.



For that I have two ideas that can be either accumulating or distributing, look for the breaks and act accordingly.






Thanks God for all the blessings
Shalom all,

Wednesday, April 25, 2018

Market down Stocks Up


I always pay attention and frequently trade stocks that go in different direction from the market, some times when the market change direction these stocks are the most profitable in the short term move.

Take these two

Toronto Dominion has been moving with the market rhythm for the last 3 months. You can see it in the charts. Clockwork identical moves.

But for the last 4 days as the market keeps on making lower lows, TD is making higher lows. Now, if the markets are nearing an oversold position, TD could take advantage of the possible rebound.







WEC made its lowest together with the market in February, after early march when that low was tested, it has been in a slow uptrend, now it is yielding over 3%. Kind of stuck for the last month.  It can goes up to 63.5 for a quick> 1% gain.




I am long both.

Thanks to God for all
Shalom everyone
 

Tuesday, April 24, 2018

Some Random Thoughts


The market tried to break above yesterday high but currently is not holding. Still hovering around the lower 45 degree channel line. Let’s see how it ends. Still some possibility, but my right line analysis tends more to a drifting position at best.






At the open I bought one of my favorites because its ability to climb with the market. A measured move should take it near 114, with a little help from the market. Stop loss at yesterday low.






At the open yesterday I went long WEC, (utilities anyone?), only to see it reverses almost immediately. Still hope with the breaking of the box and the retracement line. Target 63.5, stop loss at yesterday low.
Blowing again?





Thank you God
Shalom Alle

Sunday, April 8, 2018

El A B C y D del trading


Si, es posible obtener beneficios sistemáticamente “trading” en los mercados, ya sea corto, mediano o largo plazo, hay posibilidades de éxito en este negocio pero ten en cuenta, la especulación en los mercados financieros es un ambiente de super competencia, miles de personas e instituciones entramos todos los días al mercado y todos tenemos un objetivo en común, hacer dinero sistemáticamente negociando títulos ya sea acciones, futuros, opciones y otros.

Dicho lo anterior amigos, este es un trabajo de 24 horas al día, no digo que no haya whizz-kids por ahí, personas que sin dedicarle todo su tiempo a la especulación financiera puedan obtener beneficios, pero los grandes traders y especuladores se dedican a este negocio 24-7, sin descanso y sin ceder, tomando las ganancias y pérdidas sin emoción.

Amigos, no hay atajos para el éxito en este negocio de la especulación financiera, sencillamente no hay, mas bien es un viaje, un “relentless pursuit” o búsqueda sin descanso de la experiencia y conocimientos necesarios para el éxito, el mercado es incontrolable, pero nosotros si controlamos, controlamos nuestra actitud en el proceso de aprender este oficio, controlamos nuestras emociones, nuestra paciencia, y controlamos de qué forma invertimos nuestro dinero.

Y así, luego de esta breve reflexión, los  cuatro requisitos mínimos a cumplir para el éxito en la especulación.

A-Dinero: Si quieres vivir de especular acciones o futuros, una cuenta con suficiente dinero es imprescindible. Es verdad puedes abrir una cuenta de brokerage hasta con mil dólares, pero que esperas de esta?, retornos del 1000%, un palo con una  opción, hacer 100 trades beneficiosos sin perder??? Eso mis queridos amigos es solo ficción. Tienes que tener dinero para especular cómodo y sin presiones. Si tienes que ganar obligado, lo mas posible es que pierdas. Recuerda que si pierdes un 20%, luego tienes que ganar un 25% solo para empatar. Necesitas suficientes fondos para empezar.

B-Administración de tus fondos o como dicen en inglés, money management: Y no me refiero a complicadas formulas financieras ni a técnicas  de portfolio allocation o similares, para mi “money mangement” es simple: mantén tus pérdidas al mínimo y saca el mejor partido posible a tus ganancias. Y te doy un escenario: un trade bien pensando, analizado y ejecutado no es garantía de beneficios, ahí es que interviene tu habilidad como administrador, si no resultó sal del trade y no esperes que se recupere, por lo general no lo hará, controla tu emoción y sobrevive para otro día.


C-Paciencia: No sientas la obligación de poner trades a toda hora y todos los días, no persigas un trade si no entraste en el momento adecuado, que el dinero no te queme el bolsillo y tengas que gastarlo. Solo cuando un trade te llame, si estás seguro, si lo has analizado a profundidad, es cuando entrarás. Si maestras el arte de la paciencia tienes ya un 50% de posibilidades.

D- Un edge o ventaja: Seguro has oído lo que dicen, “en un juego de póker, si a los 5 minutos de sentarte en la mesa no has identificado al tonto, el tonto eres tú.” Así yo diría, si especulas sin un edge, el tonto eres tu. Y que es una ventaja en este negocio?, es una estrategia, es un setup que has probado y estudiado, es una combinación de factores que la mayoría de las veces arroja un resultado positivo. Tu y solo tu debes encontrar tu edge, y solo necesitas uno. Encuentra tu ventaja, negocia con consistencia y aplica buena administración, y si cumples con esto y lo combinas con paciencia, ya tienes el 100%  necesario para triunfar.

Esta es una de mis estrategias a corto plazo preferidas, por supuesto la aprendí de otros, la he probado consistentemente y presenta un buen set up para beneficios a corto plazo.

El cierre del gap.
Para shorts que son mis preferidos.
A tono con el mercado y el accionar previsto.
El precio abre con un gap a la alza. Es decir el precio de apertura del día es superior al high del día anterior.
El precio de la acción se devuelve y cruza por debajo del high del día anterior.
En ese momento tomamos el short.
Salimos con la expansión del rango en el sentido previsto con beneficios, o salimos si el trade se devuelve con pérdidas mínimas.
Y que mejor que un ejemplo para entender bien el concepto:

GBX abrió el 6 de abril a 50.75 por acción, el high del día anterior fue 49.75, es decir, GBX abrió con un gap de 1.00 dólar por acción.

En el transcurso del día y aunque abrió al alza, el precio de la acción se devuelve y cruza por debajo de los 49.75 que fue el high o precio mas alto del día anterior. En ese momento tomamos el short.
GBX cierra el día a 47.60 y hace un low a 46.50. Eso nos dió un rango de beneficios entre un 4 y un 6%, nada mal para un día de trabajo.


 
Y otro ejemplo del cierre del gap, CUK abrió con un gap de solo 0.01 y el short al nivel del high del día anterior arrojó un rango de beneficios entre 1.6 y 2.4%, tampoco mal para un día de especulación.




Thank you God for all the graces in my world.
Shalom all

Sunday, February 11, 2018

Short Term Speculating



Take every gain without showing remorse about missed profits, because an eel may escape sooner than you think. It is wise to enjoy that which is possible without hoping for the continuance of a favorable conjuncture and the persistence of good luck.
Jose de la Vega.

I am reading “Confusión de Confusiones”  a book written by Jose de La Vega about stocks speculating in 1688. It’s in antique Spanish, as you can imagine the reading is slow so I have not arrived yet to that quote, but still, it is as true today as in 1688. Of course you can find the book translated to English but I liked the idea of reading Jose exacts words.  That being said let me present a short term speculating idea.

Take a look at the SPX close in February 8, in 5 trading days almost 5 months of profits are wiped out.



We are looking for a pause in this parabolic downturn, since we have two nearer extreme low lows with at least one day in the middle, next day we go long over the previous low. This is a very short term trade. Our stop loss is a few ticks below the previous low. Next day the SPX did this:



I took two trades on Friday.

Before closing with a 5% gain, AMAT hit my stop and perversely took me out.



I had better luck with CB.




Are we going to a recession in 2018?
That’s a question for economists, being that I am a short time speculator I really don’t have an answer for that, only thing I can do is compare last recessions time with today.

In 2007 we were experimenting the scary inverted yield curve which tends to signal economic trouble ahead. Take a look at the curve on May 23, 2007, 3 and 6 months yields were above 10 years yield, that’s inverted.



At Friday we have a normal up-sloped Daily Treasury Yield Curve, which signals period of economic expansion or so they say. Yield curve rates is an excellent leading indicator.

 


In 2008 we had the subprime mortage crisis accompanied with the Lehman Brothers  and  AIG situation among others. Today as far as I know, taking cyber currencies aside, we are not experimenting any bubble, well maybe in stocks, but is a small bubble.

Anyway a downturn like this with the accompanying volatility does not go away in a few days, a lot of people sold with losses and It will be a time before that money gets confident again and return.  It is a time of opportunities in the short time scenario, both long and short.  Look at the new buildings permit, take a look at the unemployment figures, do your homework.


Thank you God for all the graces in my world.
Shalom Jose de la Vega et al.

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About Me

I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write sternloinaz@gmail.com Thanks, Erick