Trader's Corner

[thomsoad]

I wouldn't touch the stock, but what a gain!

Looked it up. Now I see what you are saying. Yeah, that is a sweet gain courtesy of SBUX.

[Slug]

Looking for a good time horizon on buying OPEN puts, but there just seems to be so much money behind this thing. Volume is strong. Any thoughts?

[gambler2075]

Looking for a good time horizon on buying OPEN puts, but there just seems to be so much money behind this thing. Volume is strong. Any thoughts?

The Fly on ibankcoin.com is long OPEN... usually I don't like to fight the Fly...

g

p.s. thinking of going long TNA again, if the tidal wave fears pass without incident (have they already) then going long would be a good idea, imo.

[snafu]

Will you buy commodities since Jpn earthquake? Would someone comment on SBUX

[gambler2075]

Excellent post on Nicolas Darvas and his trading philosophy:

Lessons From Nicolas Darvas « The Kirk Report

A few of my favorites:

“You can never go broke taking a profit” is bad advice that will result in overtrading and cutting winners short. Selling winners and holding losers is to be avoided at all times

The best speculators search only for the very best opportunities. To be truly successful, you must wait for the right opportunities to present themselves and this often means doing nothing for long periods of time

Long-term investors are the real gamblers in the market due to their eternal hope that losing stocks will come back in price

He thought many unsuccessful investors made the mistake of looking at the same familiar names that might have worked well for them in the past instead of focusing on the next stock with the right elements for the new market cycle. “I am only in infant industries where earnings could double or triple. The biggest factor in stock prices is the lure of future earnings. The dream of the future is what excites people, not the reality.”

g

[gambler2075]

Jesse Livermore was one of the greatest traders ever... Both of these books were very formative to my trading philosophy...

http://www.stockvision.org/books/Jesse_Livermore-How_To_Trade_In_Stocks_(1940_original)-EN.pdf

http://www.trading-naked.com/library/jesse_livermore.pdf

g

[Slug]

Thanks for these thoughts. Aside from options, what do you recommend for those of us who can't take $50k positions on momentum type trading.

Excellent post on Nicolas Darvas and his trading philosophy:

Lessons From Nicolas Darvas « The Kirk Report

A few of my favorites:

“You can never go broke taking a profit” is bad advice that will result in overtrading and cutting winners short. Selling winners and holding losers is to be avoided at all times

The best speculators search only for the very best opportunities. To be truly successful, you must wait for the right opportunities to present themselves and this often means doing nothing for long periods of time

Long-term investors are the real gamblers in the market due to their eternal hope that losing stocks will come back in price

He thought many unsuccessful investors made the mistake of looking at the same familiar names that might have worked well for them in the past instead of focusing on the next stock with the right elements for the new market cycle. “I am only in infant industries where earnings could double or triple. The biggest factor in stock prices is the lure of future earnings. The dream of the future is what excites people, not the reality.”

g

[gambler2075]

Thanks for these thoughts. Aside from options, what do you recommend for those of us who can't take $50k positions on momentum type trading.

I would say to trade contrarian biotech swing plays. Unfortunately for some, this method is not relevant for people who do not have a biotech/research/medical background and can see when the markets are being foolish (helped along by the analysts, of course). All of my big plays were that type of trade. I would do a ton of DD and find out why I thought the masses were wrong, and then position myself accordingly. I think that, if you pick the right beaten-down biotech play, then you can somewhat reasonably expect at least a 30-50% return in a few months... The tough part, as Livermore says is:

Men who can both be right and sit tight are uncommon."

Jesse Lauriston Livermore - Wikiquote

I'd also say that it is almost impossible for new traders to unlearn their self-sabotaging trading habits in less than 3-5 years... I have a friend who I told my biotech plays to, and I told him exactly when I was buying, or selling, or holding, and yet that friend could not keep himself from selling out when the position went against him, even though he knew my track record was pretty darn good. I think the problem is that new traders experience the emotional rollercoaster much more than experienced traders, as positions move from positive to negative, and back again. As a result, it is almost impossible for them to resist the typical urges to sell (or buy more), resulting in a losing trading experience.

I think my true edge lies in contrarian (aka 'value') investing in the biotechs, and I am fairly certain of my overall edge there. Maybe not every trade will be a winner, but enough will be for it to be worth it to stick to my strategy. I don't believe I have a definite edge in any other sort of trading, and so it is foolish to spend my time and energy trying to make little small winners here and there. I also think that there is no magic winning strategy for a new trader, and it may not be possible (and is not advisable) for new traders to try to trade in a similar style without a huge amount of risk.

That being said, if you have a winning strategy, then, although your portfolio may not be a direct line up, it should be evident that your portfolio keeps rising each quarter.

good luck,
g

[Slug]

Buying JSC (Japan Small Cap ETF) on apocalyptic weakness. Seeking entry at 37.5 for 10-15% trade.

Buying EWJ calls January 2012 10's at $1.50.

[gambler2075]

Buying JSC (Japan Small Cap ETF) on apocalyptic weakness. Seeking entry at 37.5 for 10-15% trade.

Buying EWJ calls January 2012 10's at $1.50.

I'm still kicking myself that I decided to go with TNA at the open, rather than EWJ. I ended up buying 4K of TNA at 69.72 at the open, and unfortunately, sold out at about 70.52, which was +3700$. Waaayyy too early. I should have held with my thesis (that the Japan selloff was ridiculously over done, and should have milked another 10K out of the trade.)

Or I could have gone long 20K of EWJ and made a good 10-15K on that one. Still kicking myself. The reason I didn't go long EWJ was that I thought the Japan market (being closed now) would not have nearly as much movement as the US indices.

Still, for the month of march, I've been trading 6K blocks of TZA and 4K of TNA back and forth and am up 25K$ on that since the beginning of the month.

g

[Slug]

I got my EWJ calls. Those should play out well given the time horizon. The JSC order is still open. I'm trying to recover from buying 2 GOOG calls for Mar. 19 right before the tsunami. That baby went *poof*

[gambler2075]

I'm thinking there is a decent chance we rally today. Long TNA premarket.

g

[gambler2075]

I'm thinking there is a decent chance we rally today. Long TNA premarket.

g

Bought in 4K TNA at 72.65, sold at 73.34, for +3K$. Watching for reentry now that we are down 100 points... we will see...

g

[gambler2075]

Bought in 4K TNA at 72.65, sold at 73.34, for +3K$. Watching for reentry now that we are down 100 points... we will see...

g

Made another TNA trade for 2000, +5200$ for the day, +29K$ for the month of march.

g

[Slug]

Nice. I stayed out of the mess today. So you were putting about $320k at risk today and selling on 1% moves on your money?