Stocky's Diary

[stocky]

30 Sept, 2005

Well I lost some of my discipline and bought real heck load of pennies. Anyway I will be careful with that in the future. Sometimes when you are not focusing and the urge to trade or rather 'over trade' is there. And you fall to that urge. Every trader fall so. Let me put some advice from the swing mastero, Alan Farley here

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How can you overcome the overtrading monster? Start with these seven remedial steps.

Create a trading diary. Write down every position you take and why it is worth the risk. Then keep one eye on your losses at all times. Pull out the diary and study every trade taken on your bad days.

Review the environment. Choppy markets trigger more overtrading than trending markets. Step back before the day begins and figure out what type of market you're really trading. This will lead to profound changes in strategy and discipline.

Study the charts. Was that a real pattern, or did you make one up in your head? The cold, hard numbers will keep you out of trouble as long as you're willing to follow their signals. And they're the best way to avoid impulsive behavior.

Talk to your spouse. It's hard to fight body chemistry, but dollars and cents need to be separated from thrills and chills. The best reality check I know is to confess my sins to my wife at the end of the day. She understands my trading habits better than I do.

Don't try to get even. The markets have no ego, are not out to get you and don't care about your opinion. The sooner you realize there is no revenge factor, the easier it will be to establish the discipline required to avoid overtrading.

Walk away. No one says you have to be in the market every single day. Take a few days off or shut down the computer when you reach a predetermined daily loss limit.

Study your winners. Look for the common theme when you bring home the bacon. Most overtrading is triggered by a fear of missing out on the next good trade. This can set off a series of bad positions because you're angry that the market isn't paying off.
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Not selling any today. Anyway quite busy, would also be travelling.

[wrangler]

Hi stocky
My biggest mistake from the list you posted ,but I'm getting better with patience.
Most overtrading is triggered by a fear of missing out on the next good trade

[ScottishTrader]

Hi Stocky,

Man I could do with takeing a few leaves out of that book.  This week has not been pretty for me - am down about 7% on my portfolio, primarily because of overtrading and not taking the time to get the entry signals right.

Perhaps I should give myself a break, as I've only been at this properly for a couple of months, but after last month showing more than a 60% gain (mostly on HYRF) it is too easy to get greedy.

By the way, thanks for your comments on my plays.  Seeing as every one of them (except DESC) is down, it has made me realise that I need to seriously re-evaluate my picking and trading strategy.  I've been getting quite into TA and have been posting quite a few charts here, but my concern is that I am getting over-eager, wanting to see bullish patterns in everything.

It may take me closing out on all of these losses next week and going back to following David's picks only, running with his plans and studying them as well as charting (but not buying) the movements of other stocks I'm interested in.  I saw you did this a little while back too.

It has also made me realise that I need some solid long-termers in there that I believe will give good returns on a 6-12 month timescale - any suggestions?  Basically there is simply too much volatility in my portfolio. 

One final lesson I have realised this week is don't jump into a stock only because you see it shoot up on huge volume.  These are the ones that may need the most DD, especially if it is a break from a previus pattern.  Am beginning to realise there are a lot of day traders and pros just dying to take your money if you chase breakers like this.  As they say, pigs get slaughtered.  Oh well, in this game you learn the hard way.

By the way, sorry to take over your thread with my little rant, just needed a place to voice my thoughts on what has been a painful week, but hopefully with some good lessons for me to learn.  Any suggestions from a more experienced trader, as always are welcome

[stocky]

1st Oct, 2005

Thanks ScottishTrader and Wrangler for comments and suggestions. There are infact two aspects to overtrading:

1. Greed
2. Time to get even or may be to cover up losses

I have the second reason to my credit more often then greed. I am also going through lot of stress due to my new job. Working like for 12hrs a day, 2 hrs on freeway, and then other daily pressures.

Just want to play little game starting middle of next week. Starting with $1000 I will be buying one of the 3SF recommendation [could be penny or otherwise but 3SF pick] and will compound. I will be buying and selling with David. So you all have knowledge of whats on the menu.

Too damn tired. Have to travel some 700 miles tomorrow. Goodluck all.

[stocky]

2 Oct, 2005

Today I was resting and enjoying quality time with my family at Universal Studio. David is right to say that trading should not take priority over things like family [or other relationships].

Will sell some stuff tomorrow to make room for my 1k 3SF compounding play.

Like new format of 3SF website. But my initial impression is that too much is said about 3SF and its more of a marketing oriented then a page I would like to bookmark. The index page should have simple icons for all important message boards and for the two portfolios. Though Yahoo does not have one of the best user interfaces, it does have six great simple icons which make navigation real easy. Looking forward to my 3XL T-shirt. Would love to wear it to Universal Sudios next time.

Sold GLD, HAL and EWJ

Goodluck all.

[stocky]

4 Oct, 2005

Its after a real long time that I had done some trades with good timing. Take the following cases:

Sold today at open [high for all these stocks]: UPL, CHK, KCS, VLO

Holding HYRF [3.5x], EYII [2x]

If you are looking for real good stock in energy sector then I think KCS and CHK along with UPL are the best. I dont know how long the pullback in energy sector will survive but if I ever again any energy stocks I will first consider these three.

I still think HYRF is undervalued, and EYII may be a good play too b/c of it. Dont know where the stocks will end up but I am not selling a single share unless David sell it.

Goodluck all.

[stocky]

5 Oct, 2005

So much blood on the street. Scary.

I will trim my positions in HYRF and EYII to 1x each on next trading day.

That may look like change of hearts but holding big positions and trimming down to the standard positions still means I am bullish on these stocks. Infact as a rule I wont be buying more then 0.5x for any OB [and wont buy any PK]. I still think that HYRF and EYII may be set for another beggar in a week time.

Goodluck all.

[stocky]

6 Oct, 2005

As planned trimmed HYRF and EYII at todays open to 1x positions [thats still twice my OB holding avg]. Though lucky to sell at days high again.

Also bought 0.5x positions in HEB and NVAX. I intend to add VICL if it does not open gap higher tomorrow.

Quoting master trader, Rev Shark "My gut feel is that we are on the verge of a bounce and I have covered all my hedges." I think that way too. Lets see what happens tomorrow. With bloody action again today I would like to sell all and go to the beach then to worry about any Black Monday or Black Tuesday. The pressure is not worth it

And quoting master swing trader, Alan Farley, "The financial markets offers profits in different ways at different times. Traders can't win by forcing their will on the current price action. Instead, spend a little quality time at the school of what works now and adjust your strategies to this tough October game."

[stocky]

7 Oct, 2005

I would like to buy SUNW today only if it comes closer to 4. Other then that I dont see many opportunities. Will watch HYRF and EYII both closely.

Back from work

Bought today SUNW [1x, stop at 3.95], doubled HEB to 1.2x, doubled NVAX to 1.2x. Holding and will continue to do so both HYRF and EYII.

I have to dig bit deepr into NVAX and HEB. The drop in SVA was nasty and I am not aware why it was. Will watch NVAX and HEB with possible stops near 1.8

[stocky]

10 Oct, 2005

Another busy day at work and market. Sold SUNW today at open. Bought SVA, VICL and added more HEB.

Holding: HEB [3x], NVAX, VICL, SVA, HYRF, EYII

Except EYII, I am happy holding the rest.

Made mistaken in my date keeping. This post is actually of 10 Oct.

Goodluck all.

[stocky]

11 Oct, 2005

Well not so good timing this time. Sold NVAX, VICL, SVA and EYII, in the first half hour of open.

Holding only HEB and HYRF.

I intend to hold HEB as long it closes above 1.87 which is reasonable support. If the stock gaps down a lot at open I will add to the position. This is risky day trading strategy but sometimes pays off.

I am comfortably above my portfolio goal and will step out of all stocks once I see it breaching.

Its tough out there.

Goodluck all.

[setravis]

Great work and  trading you have been doing Stocky.
Rock on!!

Applaud your work......keep it up!

[stocky]

12 Oct, 2005

Sold HEB toward the end of day. Quite a loss but that is part of the game.

Bought and sold JDSU for minor loss. Only holding HYRF.OB [1x]

Market is sliding and the best thing is to be in cash. Nothing is working and if HYRF is holding and advancing though with low volume then you can understand it could be ready for big move.

Thanks setravis, I wish I would have given more time, but can't do due to my hectic job commitments. Still hanging out tough.

The quest to find bottom is elusive. I am not giving much time to market but I would say the best method in current scenario may be day trading. Will see how David takes up the matter. I am not ready for shorting. Would wagger on pennies instead.

Goodluck all.

[stocky]

13 Oct, 2005

Quoting Rev Shark:

"What makes me a bit optimistic that a low is near is that we are seeing the opposite of the "sell the news" setup. Stocks are down sharply and negativity is high as earnings season is about to kick in. Many companies will just need to reassure investors that they are not suddenly going bankrupt and they will bounce after the pounding they have taken recently."

I am whopping 93% in cash. Also I think HYRF may be gathering steam for a big move up.

Intend to increase my stake in HYRF. But will decide finally in premarket.

[stocky]

14 Oct, 2005

The high gap up in HYRF and I did not buy as I said, no buy on gap ups. They are usually filled up. I am holding HYRF and inted to sell it near 1.8 like David. May add more, infact would have added if I had been watching the market near the end of the day.

Bought half positions in MWIS and HQSM. I missed one on BRVO but would like to jump aboard next week. Sitting on lot of cash but will wait. I am watching NVAX but still not convienced about market bounce.

Sometimes periods of inactivity leads to capital preservation. If you are not losing then you are infact winning. Heck atleast Scottrade guys pays some interest on cash account

Goodluck all.