some patterns

The basic patterns that nate uses for longs and shorts are:

Gearing / Perking
Late Day Fades
Parabolic Shorts
Red to Green on a recent high average daily range stock

also he mentions in chat that many people mention HOD. that makes sense if you want to capture very short term profits by shorting when it reaches near HOD or LOD.

Also, I mentioned about having goals to develop myself in a learning capacity in regards to the market. It is always good to learn.

BUT it is more important to put in place what you learn. So I need to also set goals each time I trade or each week/month on what I need to improve on and ACT upon my goals. Not just learn, learning will only take me so far. But creating feasible/tangible action items for physically improving is vital.

I want to improve my risk management techniques and also execute less trades. Maybe only 1 or 2 trades a week that I believe are TRULY worthwhile. I will set a limit of at maximum 2 trades per week, which will allow me to focus more on finding setups I believe are going to go in my favor under the right market conditions. Also, I want to document my trades and my thoughts and my exit plan / entry plan on each trade I place from now on.

Currently holding on to $CLSN @ 5.00, short 300 shares. Will cover if it closes over 5.20. Plan on holding for 1 week, however, if it falls very steep which is what I believe will happen, I will and hold until the selling dries up.

Challenges

Every challenging situation we face is a source of stress. Every challenging situation we face is also a potential source of well-being - and a potential source of distress.

If we reduce our stress by eliminating life's challenges, we also reduce our avenues for well-being and fulfillment.

Implicit Learning

Today's subject will be implicit learning.

"Implicit learning is the learning of complex information in an incidental manner, without awareness of what has been learned." - Cambridge

Looking over thousands of chart patterns and market fluctuations can help with your implicit learning of the market and possibly future predictions*.

What is said through research studies is that implicit learning is drastically affected when the individual is not directing his full attention to the task at hand. Stay focused!

*may vary from person to person

Side note, something I learned today, stay hungry and just do it. If it crosses your mind and you want to do it, just do it. Do it first, do it fast. Get it done. Bottom line is there are no excuses. Make your goals your priorities, do what it takes.

Trading Psychology

For the month of September, I will finish reading Trading Psychology by Brett Steenbarger.

Have only executed one trade this month, however it was a successful one. Shorted ARNA at 8.9 only to see it shoot as high as 9.39. My stop was at 9.40 and I think there must've been some divine intervention because really!?!?... .01 off from getting stopped out?! I would've died.

A few lessons, I was close to covering my position when it didn't start to go my way. Thankfully I was disciplined enough not to. Another note, I need to scale my position sizes better according to the amount of risk I am willing to take. Well 8.9 to 9.4 would've been 100 loss, including 14 trade so that's right around 2%. I guess its not that bad, but it would've hurt really badly as the first trade of the month.

It takes more gains to come back from an original loss.

Ideas I have are creating a system where I will scan for weekly patterns that match my sentiment on the either the direction of the market, or pumped up stocks that have gone "parabolic" according to Nate.

I need a scan for short term buys, short term shorts. Also, interested in predicting the overall market and it's direction. After reading about Trading Psychology I will try and learn more about Market Breadth. Technical Analysis will come next for November.

Goal for the month is $305.10. Let's get it.

"See one, do one, teach one"

A quote from Keyne

"The contests required readers to choose the “most beautiful” from a  set of published faces; readers which correctly picked the most popular  faces won a prize. The trick was to choose not the faces you found most  beautiful, but those likely to gain majority approval."

Professional traders speak the same language.

Symbols to watch

Interested in $CBM, $ARRY (s/s), $VELT (s/s)

It feels good to get back into the habit of watching the market. Will try and post more frequently now.

August goal, $210.

Executed 1 trade so far this month on VVUS, earned 3% on that trade. Not bad at all.

Trades missed, $GROV, a pump and dump...was pretty certain of my idea, but did not have the courage to pull the trigger. I was absolutely right, it looked like every other pump and dump. It's currently getting dumped, but it increased 100% over a few days. The volume was extremely small though.

A stock worth $5 in a bear market is worth $10 in a bull market. Best ally is underlying conditions.

Momentum studies:

• Stocks exhibiting 3-6-12 month momentum are likely to outperform in subsequent 3-6-12 month period.
• 1 month momentum tends to lead to reversal.
• Longer term momentum of 2-3 years also tend to lead to reversal.
• Momentum effect is more pronounced for small capitalization stocks.
• Studies also show sector momentum works in similar manner to stock momentum.

Breakouts - simple they are an indicator that a new trend has arrived. Too much over thinking and worrying about how to make money off breakouts has left my brain mushy and forget the simplicity of it. Breakouts work great because they are easy to see for the average investor / trader so they signal a buy point. Not every investor will be able to read Candlestick patterns or take the time to do so. And when something breaks out to higher highs, it is even easier to see.

Hmmm, why is it that after a breakout a stock sometime takes time to move upward? When I find the answer I'll repost.

Defined by Investopedia

A price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Traders will buy the underlying asset when the price breaks above a level of resistance and sell when it breaks below support.  

Hello!

A new blog developed to track my learning progress, trades, and market conditions. Also will be used to reflect upon trading ideas, the thought process behind behavior finance, and trading psychology.