My Squeezers Be Squeezin’

If you read my previous 2 posts on short squeezes (odds enhancer for breakout post and watchlist) and happened to enter on a few, you might be pretty happy.

Here are a few trades I am in that was on the list.

Red line was the trigger.  As I was still a bit hesitant about my own research and backtesting, I entered with smaller than usual size.  Fortunately the day after I was triggered in, we had a huge gap up and I took off 1/2 of my size.  I took another 1/4 off today as it pushes higher and will leave the last 1/4 as I trail my stop up below the previous close.  Awesome trade.

TWLO Squeeze

 

Here is another I entered with smaller than usual size, but it didn’t matter, as you’ll see on the chart.

Plnt squeeze

Boom goes the dynamite.  I’m out with 3/4.  Wish I would’ve stayed in full size as it would’ve probably been the biggest winner of the year.  Just trailing my stop up behind the prior day’s close with the last 1/4 size.

 

Of course, not all are winners.  Here is one that got triggered and I am still in.  I saw heavy, heavy selling coming it once it broke out. So either long positions are taking profits as they aren’t too convinced of the breakout or some funds are adding to their short positions.  Maybe the funds know something I don’t?  Well if they’re right, I only lose 1% of my account.  The reward is absolutely worth the risk.  If it breaks that recent high one more time, I think they’ll exit as they’ve brought this stock down from breaking out 3 days in a row and more eyes are on this stock to breakout long so we should have more buyers coming in as well.  Just my thought process on keeping my conviction.

 

MDXG squeeze.png

 

Last one I had on my list that I enteredSwft squeeze.png The day it triggered, it shot up and hit my first target. I thought, wow, this is going to the moon.  So instead of sticking to my rules, I only took off 1/4 of my position (instead of half like I have planned).  I forgot to move my stop to break even and 2 days later, I saw some red in my account manager and when I took a look, my slightly profitable position was now slightly losing.  Frustrated, I just closed it out.  My fault so it was my way of punishing myself.  I would’ve been alright if I stuck around but, meh.

 

The rest on the list either didn’t trigger or I missed and wasn’t able to enter.  I don’t always put out automated orders to enter.  I like to see what it looks like when it approaches the breakout point.  I don’t want it dilly dallying up there.  If I get a nice surge up, I want in.  So depending on my feeling, I may stay out even if all the stars align.

Here is one I had my doubts on that was on my list.  Reason being there were 2 points of resistance in May and March.  So I thought, it would hit some speed bumps at those points and I would rather a clean, rapid move up without any sellers coming in.

RDUS squeeze

Damn.  I gotta stop looking at this chart.  Keep kicking myself for not entering on this.

That’s all for now.  Hope to give you guys a few more to look at and hopefully you can make up your own trade ideas and share!

Great weekend everyone.

Squeeze List for the Week

Following up with my last post, I’d like to share with you ladies the list of stocks I have on my short squeeze list this week.  They provide great swing trade ideas as well as trade ideas you might want to implement intraday.

PLEASE do your own due diligence.  The worst thing newer traders can do (I’ve been there) is blindly enter along just because it kinda looks OK.  Know why you get in, what your risk is and where you will take profit.  These are just ideas for the week.

 

RDUS squeeze.png

Looks great for a trigger this week.  All the short sellers have been happy lining their pockets since mid-February and I think the short party has come to an end.  Had a gap up and big surge up that was met with a huge “nuh uh, not today,” selling pressure.  Whether it’s algos, a hedge fund manager who hates losing or a fat finger trade, doesn’t matter.  We know the shorts piled in here and are feeling confident.  But wait, uh oh.  We had a nice pop back up and re-testing the high of that big gap up-shut down day.  Looks like a great pattern to get long, perhaps this week.  If it does, those shorts are gonna be in pain.

Next up, (gotta love that ticker symbol) THC.

THC squeeze

Again, it was a short party for the last few months.  Shorts were happy, taking profits, adding to their positions.  Then May.  Boom.  I bet a lot of shorts got caught in that gap up and “doubled down” on their positions thinking that the gap up would get closed.  They are really feeling the pain now as price is re-testing the resistance in that consolidation.  If it breaks out above that red line, I’m definitely getting in.

 

Next, kind of strange one.  Not sure what is going on here but you might want  it on the radar.  Not as clear cut as the last two but worth noting, and who knows, might even be a better candidate.

ANGI squeeze

Here we have an uptrending stocks.  Why are there so many shorts involved?  I don’t know.  Bad news?  Lawsuit?  Again, I dunno.  But with that many short sellers, it’s in a pretty decent uptrend and looking to break out this week.

 

Last up for this week is RES.

RES squeeze

Again, short sellers loved this stock since January.  Piling in, taking profits all until April when the next pull back was a bit bigger than most short sellers wanted.  Then a higher high formed and now we are in an uptrend.  57% short sellers in this!  Wowzers.  I think that big green day 4 bars from the right was the first day of a small squeeze and my thinking is that the short sellers piled in more which brought it down hard the next day. Then we had a small gap down and a doji.  Buyers came back in and short sellers were feeling the heat and another ramp up on the most recent day.  I think if it breaks that orange line, a lot of short sellers who piled in on the last false breakout will have had enough and scream “uncle!”  And I’ll be there, cranking back on the Brett Hart sharpshooter collecting my benjies.

Hope this provides some of you guys with some trade ideas for the coming week – either swing or intraday.

It will be interesting to see how these stocks work out.  It is a newer tactic I have started implementing with good success so I hope to see it continue.

Happy Sunday fun day.  I just love running these screeners hungover.

 

 

 

Odds Enhancer for Breakout Trades

One of my favorite swing trades is the traditional breakout or breakdown trade on the daily chart.  My favorite breakout pattern is probably the cup and handle.  The name of the formation is not important.  What is important is that price reached an area of resistance 2 previous times (when going long) and is now approaching the resistance area for the 3rd time.  Also important is that the previous swing low was higher that swing low before that. Some get fancy and call it other names, ascending triangle, head and shoulders.  Whatever it is you want to call it, the important thing is that if price doesn’t break the third time, there are some big players that don’t want it going up.

Not the most picture perfect example but you can see resistance back in March was then sort of retested in early May then a sharp move up again in later May.  When it comes roaring up like that, I’ll take my chances that it’ll breakout on a strong stock like this.

MU June Swing

So that is just some background on regular vanilla breakout trades that I like to take.  Nothing more, nothing less than what I just typed out.  Don’t need to get cute with super precise entries on an intraday chart or have any super complicated money management other than the 3×3 method I covered in an earlier post.

ALRIGHT BRO, so what is the odds enhancer?  Get to the good shit.  I don’t care about the plain jane stuff.  Gimme the grail!

Well the past few weeks I have been trying to up my game, add some new weapons if you will.  Of course in the past I’ve read several times about short squeezes.  Never took an interest in them as I usually associated them with penny stocks or day trading stocks that have big gaps up where short sellers panic after a sharp rise and prices just go to the moon.  I accidentally came across some articles on short squeezes for swing trading and did some research.

After absorbing what I had read and putting together a tactic and paper trading it a few times, I had a very high success rate (for at least the entry).  I won’t go into money management because I am still working on that.  Just using the 3×3 method for now and seems to be working.  I went live with it this week and so far I have 2 winners (paper trades I was 3 for 4).

So how do you do it.  Spill the beans.  Take me to paradise.  You just wasted 5 minutes of my time writing all that nonsense above.  Alright, alright.

Head on over to Finviz.  On the screener, we want to search for stocks susceptible to short squeezes.  What this means is that we want stocks priced over $10, avg volume > 750k and here’s the important titty-bits.  You want to search for “short float” over 15%. This is the percentage of total shares being shorted.  The higher, the better.  Also “short ratio” you want 5 or more.  This is the total number of days short sellers have to cover their positions.  It is relative to the average daily shares traded and short positions.

Here is one I’m in now.  Notice the red box.  This stock is being shorted out the ass, almost 26% of shares outstanding are shorts.  I don’t know why, I don’t care.  But it’s in an uptrend and about to break out of the resistance I drew in with an orange line.  I placed an order to buy should this stock break out and it did.  And they usually will, if you picked the right spot where short sellers are getting their stops hit.  That is up to you to determine where it may be.

 

 

PLNT Squeeze

That’s it for the screener.  What’s the trigger?

So what we want is an entry at a point where short sellers are thinking “oh shit.”  And a traditional breakout point (long) is the perfect place where a lot of stop orders will be hit and other short sellers will be feeling the burn.  You do not want to use this tactic with stocks that are down trending strongly or in a wild range.

Here is another one I’m in now.  I never know if there will be strong follow through or not but the odds are definitely on my side.

Twlo squeeze.png

Just look at that.  Half of all the shares outstanding are being shorted!  That is pretty crazy if you think about it.  And it has been showing an uptrend as of late (although weak).  There is also a nice breakout formation where I placed the orange line.  I was entered into this trade on Friday.  Hoping to see some continuation on Monday and the more this goes up, the more those short sellers are going to panic and get out of this and that means more $$ in my pocket.

Here is one I paper traded.  Wow.  Just look at this squeeze.  I believe the short float at the time was over 50% as well.  The short sellers are still trying to get out of this and panic has set in.  Who knows how much higher it will go.

Omer squeeze

As for now the way I will approach these going forward is to scan for new potential short squeezes every Sunday.  Put out my orders a cent or so above the breakout point and let them do their magic.  Unfortunately, although you may get a candidate or two per week, they don’t always trigger.  So you might go a week or longer without any trades.  It’s a great odds enhancer and a great way to boost your win rate if you can stay patient and take only these types of trades.

I’m also researching how these might be good day trading candidates as well.  Imagine getting into a trade like OMER with a tight stop using day trading size and just trailing the stop up above the previous day’s low.  My goodness that’s a monster trade where if you can nail one a year, it’ll more than make up for all the small losses.

Will update on the results and how these are going.  Happy trading.  Ya filthy animals.

 

Market Makers, Institutions and Indicators

When I went to university over 10 years ago now, I had a friend from New York and his dad always carried in his pocket, a big roll of 100 dollar bills in a rubber band.  Money never seemed to be an issue for him as he bought his son, my friend, a nice SUV.  The dad himself drove a nice car, he always took us out to eat at nice restaurants and tipped well.  He usually swiped off a Benjamin to give to his son to tell to buy some beer for himself and his buddies.  Cool guy.

Never really wondered at that time what he did for a living.  Even if I had known, it wouldn’t have really mattered.  Only recently did I get back in touch with my friend from our days in school and out of curiosity asked him what his dad did (I even thought maybe he was in the mob).  He wasn’t exactly sure and said he worked “doing stocks,” at the NY stock exchange and then switched over to JP Morgan and now is retired.

So of course, I had to talk to him.  I asked my friend for his number and gave him a call almost immediately.  After some small talk, I dove in.

“So…… I heard you used to work in Wall St.?”

“That’s right.  I was a market maker and later went over to JP Morgan as an institutional buyer.  We used to make most of our money on the spreads but you can’t really do that anymore.  We had to adapt and most of us went the way of the dinosaur.”

Wow.  Some great insight.  I had to go further.  I want to know it all.  Indicators, ratios, algos, whatever it is, I need to know.  Unfortunately, I was quite underwhelmed with how he said they operated.

“Well, VWAP is important.  Keep an eye on that.  I didn’t use it, but a lot of guys did.  A Fiba-wha?  I don’t know what that is.  Yeah pivot points (he actually had a different name for them, I can’t recall) are levels to look at as well.  Time frame?  Doesn’t matter.  I just go off the tape and feel.  I used to trade AAPL and didn’t need a chart.  You told me a price and I looked at the tape and knew when I wanted to buy.  I’ve been retired for 15 years now, so I’m not sure how those guys work these days.”

So after about 40 minutes of talk and questions, I learned a lot but also reinforced what all of us traders know already.  It’s all about experience, time in front of the screens and the “feel.”  There was no secret.  No formula.  No grail.  He had put in 6 years as an intern then an errand boy for a few more.  No formal education.  10 years in they put him on the floor and that’s that.

Interesting, as after our talk, I decided to add pivot points and VWAP onto my charts. Removed all EMA’s, prior day H/L/C.  I never used Fibo’s.

You’d be surprised at how, to the cent, you’ll find reversals, support and resistance at these levels.  More than an EMA, more than a fibonacci.  So some ways I’ve been trying lately to incorporate these levels into my trading is to use them as an added odds enhancer.  What you’ll notice is the charts that look ugly, don’t follow any rules.  VWAP, pivot points, your secret juice EMA crossover.  Won’t do shit.  That’s because price there is completely random.

IF, however, you find a nicely trending stock where you absolutely can tell institutional interest is happening (higher volume than normal), you’ll be amazed at where pullbacks will stop right at the VWAP, reverse back to the dominant trend and find profit taking at a pivot point, rinse and repeat to the end of the day.  The hard part of course is finding these stocks as they are happening throughout the day.  Only in hindsight do you wish you could’ve had that stock to trade during the day.

Here’s a stock I’ve enjoyed trading the past week.  Notice the VWAP reversals.  I usually look for a doji or low risk signal bar near VWAP (it can be above or below by a little) and take entry .01 above it with the stop .01 below it.  Targets are usually 1/2 at 1:1.  Then if it takes off, I will wait for the next pullback and stick the stop under that.  If it’s starting to get choppy, I’ll try my best to take the rest off at at least 2.5/3:1. If I sense exhaustion, I’ll take profit.

MOMO

MOMO 2

 

Here is JD, another trade I took with trigger near the VWAP.  Best trade I had all month.

JD

Same stock a day later.  Outstanding doji signal bar at about 10:15, entry is .01 break below.  I should’ve held my second half longer as I exited when I got a 3rd bounce off of the day’s low.

JD 2

A few days later.  Notice this time it was hard to find an entry at 10:30.  I don’t recommend taking a blind entry just because it is at the VWAP.  You need a signal bar or entry technique which this kind of provided, but with increased risk (entry under that green bar means large stop).  Just after 12:00 provided a good signal bar or even at 12:45 but I don’t usually take trades at lunch time.

JD 3

Last trade I took yesterday.  MU.  Entry was at 11:50.  Perfect signal bar, just look at that narrow range doji.  Took entry .01 below that.  1/2 off at 1:1.  Then I took the second half off right after that bounce at 12:35 for about a 2.5:1.

MU

 

 

Some more trades I’m in (6/1/2017)

Forgot to add these to my last post.  That one was running a bit long so I thought I’d just start a new post with a new watch list.

A – 3×3 method.  Looking good so far

A Swing

Bottom red line was my trigger.  Middle red line is +1.5% where I will move my stop loss to break even.  Top red line is +3% profit target.  Again, as always, if the price hits my 1st target without a pullback, I will take off the full position.  If it pulls back before my first target, I will take off 3/4 when it reaches it as usually after a pullback it sets up for another run up (not always, of course).

Same story.  3×3 on DRI.  Middle line is +1.5%.  Just about there, hoping for some strong continuation today before the weekend.

DRI Swing

 

Last trade I am in is VFC.  This is the pullback consolidation method.

VFC Swing

Looks like the recent uptrend has come to a halt and the first pullback after the confirmed down trend is occurring.  Triggered in at the top red line.  Price made one attempt to go lower about 6 days prior to my entry.  So this is the second time prices will attempt to go down so I like the odds.

Middle red line is my 1st target.  I’ll take off 1/2 my position here as that will cover my initial risk.  The bottom red line is my 2nd target where I may take off 1/4.  Like I said, I don’t trust the market to follow technical analysis books – this is a clear cut downtrend but expecting prices move down below the previous low is a lot to ask for.

Like I said, even if I’m wrong, I like profiting.  If I subscribed to the 4:1 rule with my full size, I’d be pulling my hair out at any bounce or movement against me.  Peel off some money as it moves down.  I like it.

Actually, no watch list stocks today as it is Friday and I don’t take swing trades on Friday.  So will manage these positions today and look for new picks over the weekend.

Holla.

 

 

I love quick hitters – Swing follow up

If you took a look at my previous swing trade posts and followed up, you’ll see that a few of them have hit their targets within a day or two.

That is the best part of trading breakouts with a reasonable target.  They are usually hit within a week, and if you are lucky, within a day or two.

Here’s the follow up to my swing trade posts with a few additions.

MU – target hit in 2 days.  Entry was at $30.01.  Using the 3×3 method, first target is +3% so, $30.90.  Hit on the second day and I actually took off the full position.  Usually you should take off 3/4 and let 1/4 ride to 6% or more if you can.  I didn’t want to sit through the pullback and actually my available margin was all used up so I wanted to concentrate on other trades.

MU June Swing

 

Next trade was AAN.  This method was the pullback-consolidation-breakout with my first target at 1.5x risk.  So the way I handle these are wherever my stop is, let’s say $1 away, my first target will be 1.5x risk (+$1.50) and I will take off 3/4 of my position there.  This means that my original risk of $1 @ 100 shares =$100 is now actually positive since my first target profit will net me $1.5 * 75 shares = $112.50.

AAN Swing

If you’ve studied anything about your expected R, it dives into your expected return.  If you are always risking $100 per trade and you make $150 on your winners and 50/50 win to loss your expected R stays positive.  By making a first target that exceeds your maximum loss and having a 50/50 win to loss, you’ll always make money.  And then leaving 1/2 or 1/4 position on to run will sometimes get you that home run trade with little to no stress as you’ve already banked a profit exceeding your original stop.

So if you use this method and your first target is the only one that is ever hit and you only win 50% of the time, you will still be profitable.

*One thing I’ve learned is to not chew off more than I can eat.  Most technical analysis books preach you need a 3:1, or 6:1 or whatever target.  And I used to subscribe to that. Only, my targets were rarely being hit, and the losses piled up.  Or a trade would go my way 2.5x my risk with target at 4x and start pulling back and I would panic and end up selling at .8x risk and my profit is less than my original risk.  Doing this while taking full losses will net you a losing trader.

In my experience, the 4:1 or more trades is a tough game to play.  Your winning percentage will be lower and your patience tested.  Are you confident and patient enough that if a trade went your way 2x your risk and is now pulling back to take you out for a full loss, that you aren’t just going to take that little bit of profit before it goes to your entry price?   You keep doing this and you’re screwed.  If you don’t mind striking out 4 or 5 times to hit 1 home run then great.  Me?  I like hitting singles and doubles every day with an occasional home run.  Keeps my confidence high and my draw downs light.

Also, taking off 1/2 or 3/4 position at a reasonable target that is below the recent swing high or swing low ensures that even if you were wrong about the trend, you’ll still profit. That is a very powerful thing – to profit even when your expectations were wrong.  Expecting price to exceed the previous high or low not only takes patience but a very confident mindset.

Enough rambling.  Great trade.  Took off 3/4 of my position at the middle red line which ended up being close to 2x my risk.  So moved the stop to break even and my next target for the remaining 1/4 is at the top red line.

 

CSX.  Another 3×3 breakout trade.  The middle red line is the +3% target.  Reached in one day.  Yesssir.  Love these quick hitters.  I actually took off the full position on this as well rather than leaving another 1/4 in play.  Reason is like MU, if my target is reached in a day or two, I’d rather just take it all off than sit through an impending pullback.   If the pullback happens before my first +3% target, then I know it has room to run again and I’ll take off 3/4 in that situation with the remaining 1/4 hopefully netting me +6% or more.

CSX swing trade

 

SBUX.  On a roll here.  Just about .10 from my first +3% target.  It is tough not to just take it now, but if you do that, you’re risking messing up your whole system.  So, stay diligent and only take profits when your targets are hit.

My stop loss is also up to break even ($61.99) since it surpassed the +1.5% mark (middle red line).  If it goes through a pullback before reaching the target, I will take off 3/4.  If the target is hit today or tomorrow, I’ll take off the full position.  Again, if it hits the target without a pullback first, I usually take the full position off.  Don’t like sitting through pull backs and risk it tapping the entry point to take my out.  Also frees up capital for other trades.

SBUX Swing

 

Next up is EXEL.  This was on my list back on the 15th to enter.  Luckily I wasn’t following it and it actually had a false break down at around $19.50.  Since I missed it (luckily, because I would’ve been stopped out) and it pulled back, I placed a small order of half my normal size at $21.99.  Price shot down the next day and re-tested the new break down point.  I had my normal size here at the break down (top red line) and was triggered and first target hit in one day.

EXEL Swing

Took only 1/2 off at the first target of -3% (middle red line) because I had bigger size on it than usual (since I used a front-running entry in addition to the break down).  The next day showed some weakness, so I took off another 1/4 position at the bottom red line.

The last 1/4 position I moved to break even.  Price eventually shot back up and took out the 1/4 position.  Great trade.

 

Last one in progress is DKS.  Posted this with trigger a few days ago.  The top red line was my first entry trigger.  This is using the pullback-consolidation-breakout method.  I was triggered in on that big red candle down.  Just missed my 1st target for this method, which is the middle red line.

The bottom red line is the break down point.  I am contemplating whether to just leave the full size on in anticipation of the break downor to take some size off at my first target to lock in some profits in case it bounces or to even add to my position at the break down point.

DKS swing.png

I think what I will do is just leave the full position on in anticipation of the break down and if it bounces, I will take off 3/4 of my position.  If it re-tests the break down point, I’ll add 1/2 of my normal size for the 3×3 break down play.

So you can combine the 3×3 method with the pullback-consolidation method for good results.  Just don’t get too greedy.

 

DUDE, YOU’RE SO FULL OF SHIT.  You only posted your winners.  Anybody can do that.  Yes, I know.  I called these trades out a few days back and am following up now – there was no editing or additions made to that post.

BUT, inevitably, I did take a few that I didn’t post and I will share those with you.  And yes there are losing trades.

SBGI.  Failed immediately.  Was triggered in and the day closed at kind of a doji.  The next day when I saw the momentum shoot up, I exited before my full stop was hit.  So I took about 75% of my full loss.  Lucky me as later in the day it shot up even more so it would’ve taken me out at my full loss anyway.

SBGI Swing

I think when you see this kind of momentum going against you and your play is a break out or break down, it’s better to get out early than to sit and hope and pray.  And keeping losers smaller than winners never hurt anyone.

 

And the last stinker I had was NWL.  Again, played the 3×3 break out on this and it pretty much failed immediately.  I exited after the day finished down a solid red.  So, again, I took less of a loss on this than the full -3%.

I think if you are triggered in and the trade kind of oscillates at that break out point, you want to stick with it.  These strong bounces off of the break out point is a good sign to get out with a smaller than usual loss.

NWL Swing

 

In Summary: 2 losers, 5 winners, 1 trade in profit.  Every winner’s first target was at least my full risk.   As I mentioned earlier, shooting for 3:1, 5:1 targets is, to me, a really really tough game to play.  Trust me, I’ve played it for the past 5 months.  My advice – keep your targets reasonable (1x, 1.5x) and take a partial.  If you think it’s a 4:1 trade, let the last 1/4 position go until your 4x target.  If you’re wrong, you still profit.  If you’re right, you profit even more.   Don’t trust the market to stick to technical analysis rules.  You’ll be disappointed A LOT.  Squeeze out what you can and don’t get greedy.

Long post.  I’m up about $1500 this past month on my swing trades on a $10k account. Not bad.  This is the second month in a row for profitable swing trades.  I think I’m starting to hit my stride.

Hope to keep this momentum going.  This is a good way to journal as well.  I hate journaling but I don’t mind posting my charts on here.  And I like bragging.  Just kidding.  I hope some of you can take what I’m journaling and put it to good use.

Cheers

 

Some more swing trades

Been seeing some good success with my swing trades lately so wanted to share some more charts with ya’ll.  We all love charts, don’t we?  I know I do.

I have been swing trading regularly for about 8 months now – about 5 of them taken a bit more seriously.  The first 3 months just kind of small sizes, risking about .5% of my account, fiddling around with some shit.  I started in about September of 2016 with around $8000 or so in a Scottrade account.  I took a handful of trades through the end of the year until about February that I realized I was just spinning my wheels.  Luckily, I had one monster trade in AMD take my account up to about $9600 or so.  The rest were small losers and a handful of bigger winners.

Switched over to IB and the commissions are so low that I am less gun-shy at making trades and taking partials since $2 round trip sure as hell beats $14 round trip.  Especially if you have 2 different targets.  Then you’re paying $21-$28 to scale out for Scottrade and $4 for IB.  BIG HUGE difference.  Anyway, since employing and sticking to a set of rules and criteria, I have seen some good results. My account as of May 29th, 2017 is at $11,030.

Basically the two strategies I use are pullback-consolidation-breakouts which I briefly explained in an earlier post and the breakouts/breakdown strategy using the 3×3 method.

Here are some more trades I am either in or waiting for entry.

AAN – red line was my trigger.  Pullback consolidation breakout method.  I am in long.  My stop is at $34.99 just below the whole number.  Taking off 1/2 off of my position at 1x my risk with my second half target slightly above the recent swing high at $38.

AAN Swing

 

DKS – has taken a beating lately.  Looking to enter on a break below the low of those 2 dojis.  Keeping a tight stop .01 above the doji high.  My first target will be 1x my risk, unless it moves down with strong momentum.  If it moves down strong I may even add to my position to play the breakdown of the double touch you see there.  If unsure, I’ll take off 1/2 at 1x my risk and let the other half ride with my stop at break even.

DKS swing

 

PCAR – This one I will enter using the 3×3 method.  Nice tight consolidation right at the breakdown level.  If it breaks below $62 I will have a stop limit order sitting at $61.98 with my first target at 3% or $60.14.

PCAR swing

 

MU – last trade I’m looking at this week for entry using the 3×3 method. I’ve made some money off of this stock twice now since January. The S&P is making new all time highs and just broke out so I like the support that MU will have behind it.  It has also been strong all year.  Looking for a break above the highs with entry at $29.88.  First target at +3% or $30.78.

MU Swing

 

That’s it for what I am keeping my eye out for this week.

3×3 method for swing trades

I would like to share with you guys another method I use for swing trades.  I use 2 methods, the other which I covered earlier.  This second one has been very successful for me as of late.  I think it works well in markets that are trending and either making new highs or new lows.  The biggest benefit of this method is that every situation is pretty much covered in the description below.  Nothing is really left to your discretion other than the second profit target (but if you get to that point, you won’t care about specifics).

I won’t go into details of the technical entry point as that’s a whole different post.  BUT, if you have an entry that you like to take, here is a great method to use to remove some emotions from the trade.  The entry I like to use for this method are breakouts and breakdowns.  (If you have questions on what those are, just e-mail me).

The method goes as follow (risk 1-2% of your account balance per trade):

Entry and profit taking:

  • Find your technical entry (I like to use breakouts and breakdowns for this method but you can also use pullback-continuations if you are experienced and good with your entries.  I like breakouts/downs because the entry is specific and not as subjective as when to enter on a pullback).
  • After it is triggered, place your first target for +3% of the entry price.  If you entered long at $62.50 the first target is $64.38.  If short, $60.62 for the 1st target.
  • Take 75% of the position off at the first target.
  • Move your stop loss to break even after the first target has been hit.
  • Second target will be at anywhere between 6% and 12%.  This is where your discretion comes in.  If it hits your target and made a pullback and now making the next leg up or down, just move your stop up/down to the recent swing and keep trailing it up under the previous day’s low.  Sometimes you’ll make just as much on the 1/4 position as you did on the first 3/4.
  • If you are not by the computer screen all day, just leave it at 6%.

Entry conditions:

  • If price gaps above or below your trigger by more than 1%, do not take the trade.

Profit Protection:

  • If price moves more than 50% above your trigger to the first target (1.5% of the price), move your stop for 1/2 of the position to the entry price.  If price reverses and goes back to your entry, you will close 1/2 of your position and leave your initial target and stop in place for the other 1/2.  Or if you want, you can close out the full position at break even and re-enter later if you want.
  • This strategy uses momentum for its main reason of profiting.  So if prices sharply reverse, that means that the odds are no longer on your side and (60-80%) of the time it isn’t going to follow through.

Drifting:

  • If you are triggered into a trade and the price of the trade ranges between your entry and the target for more than 9 days, exit the trade with whatever profit you have until that point.  If you still feel good about the trade, close out 1/2 – 3/4 of your position and move your stop to break even.  Free up your capital for other trades that are going to move.

OH SHIT situation:

  • Price has just gapped up or down on your position, past the 3% stop.  Do not panic and exit just yet.
  • Switch to the intraday 5 minute chart.  Wait for the first swing high or low to be made.  Your revised stop is now a few cents above or below this swing.  You’ll find that most of the time the price will move back in your favor.
  • Leave the new stop in place and close when you reach your 3% stop or close out a portion of your position if the move in your direction was sharp.

SUMMARY:

  • 1st target is at 3% of the price.  2nd target at 6-12%
  • After 1st target hit, move stop to break even
  • If the trade gets triggered, goes 50% of the way to your first target and reverses, close out 1/2 of all of your position at break even.
  • Close the drifting positions after 9 days as now you’re gambling with the move
  • The only time you’ll take a full loss is if you get triggered in and prices sharply go against you 3%.  In my experience it has been rare if you choose good entries.

Here are some examples of trades I am currently in using this strategy:

Starbucks.  Great follow through so far.  The red lines are entry, 1.5% to target (which indicates if it reverses back to entry, I will exit at break even) and the first target line of 3%.  Notice how prices sharply turned down after hitting the same exact price 3 separate times, to the cent.  That is a great sign or an odds enhancer that the next time prices reach it, it will break through with conviction.

SBUX swing

 

CSX – Almost identical to Starbucks.  Prices reached resistance 3 separate times.  It has reached 1/2 the way to my target, so my stop loss is now at break even.  Hoping for follow through to my first 3% target.

CSX swing trade

 

EXEL – Here you can see how to handle a trade that gets triggered and goes against you right away.  It reached 1/2 way to my target, so I moved my stop loss to break even.  The next day, I got taken out for a break even trade.  Prices retraced quite a bit and is now looking again to go to the downside.  I actually re-entered this trade short, hoping to see some continuation down.  My new stop is the high of the previous day.  Revised target is 1x my risk for 3/4 of my position.

EXEL swing trade

 

Lambos and bitches.  You follow the rules, you’ll get just that.  And so many gold watches, pimp ass Yeezy sneakers and instagram followers it’s gonna make your bipper jump.

ThinkorSwim (ToS) is closing accounts (and a work around).

Just a heads up for those of you who use ToS platform for charting or paper trading.  I had opened an account with them about a year ago but of course I didn’t make any deposit.  It was purely for the live data feed and their excellent charting platform.  Recently, I got an e-mail notifying me of a $0 zero balance and that they would soon be closing my TD Ameritrade account which would in turn make my ToS platform login no longer valid.  Went to login and lo and behold, the username was no longer valid.

TDClosed

Anyway, I gave them a call to see what was up and they mentioned that they would soon be sweeping and closing down account balances of $0.  Whether your account raises a flag or not, is pure chance.  So you may get by with no issues but it may just be a matter of time before your zero account raises a flag.  Also, the delayed data paper trade side of things would also be limited to 60 days use.  So after 60 days you could either sign up again and keep doing so every 60 days or use the work around.

So, what is the work around?  Well, if you shop around charting platforms, you’ll know that they aren’t cheap.  TC2000 is a good choice but runs about $45 a month with the data feeds.  ESignal runs over $100 a month with data and IB charts are trash.  Taking this into consideration, I’ve found that depositing the bare minimum into the TD Ameritrade account gives you the charting platform, paper money, live data, level 2, the whole package.  And the best part is that $50 is the account minimum.  And you can fund instantly with your bank routing and account number and start using the platform right away.  And it’s $50.  Ya cheap bastards.

If you compare the main charting platforms like that, ToS is by far the best bang for your buck.  And at a one time charge of $50, a steal.  Not to mention that you can always get your $50 back if you want to wire the money back out.  It’s more of a holding fee to use ToS than anything.

Hope that helps with those of you who run into any issues with them.  If you have any other work around please leave a comment.  Ya cheapo.

Cheers

Best music of the late 90’s early 2000’s

Warning: If you aren’t a hip hop / rap fan of the 90’s, you aren’t cool.  Just kidding…. you might be cool but you are so white.

Born in January of ’85, I grew up in the sticks of central Pennsylvania.  I played football, baseball, and shot BB guns.  I tried chewing tobacco when I was 12 and had my first beer when I was 15.  Bon Jovi, Journey, Guns n Roses and Metallica were on constant repeat in town.  I hated them.  Actually Guns n Roses is alright.  Metallica is alright too.  Bon Jovi and Journey are pretty awful to my ears, even to this day.  I just want to jump out into traffic every time I hear crowds of frat-boy type white folk half drunk sing “OHHHHHH, WE’RE HALFWAYYYY THEEERRRREE… OHHHHH OHHHHHHH, LIVINGGGGG ON A PRRAAAAAAYYYYER.”

Oh man, typing that was painful.  Fuck.

So my guilty pleasure….. rap music.  My dad hated it, my friends hated it and I probably would’ve been called names for listening to it.  But I loved it.  I remember saving up money to buy my first rap album and probably my favorite of all time.  DMX – It’s Dark and Hell is Hot.  Got damn, that was such a good album.  I’d rock that on my Sony Discman ESP with 10 second skip protection on repeat for months.  I’d tap the top of my CD player to see how long it would go until it started skipping.  And it took AA batteries. I’d go through those Duracell AA’s like a hot knife through butter. Oh man, some of the best times ever.

I remember listening to the DMX track “Intro,” before getting into my first fist fight.  It was one of those scheduled fights like “yo, meet me out back at 1:00PM tomorrow.”  I put on that DMX track, felt the adrenaline surge, the hype of motivation, rolled up and one punch later, I was standing over a body with a smirk on my face.  Alright, maybe it didn’t happen like that.  Not at all.  But Mike Tyson and Chuck Liddell both had it as their entrance song so that’s saying something, no?

And then I listen to this garbage they put out now.  Man, no wonder why so many people hate on hip hop and rap.  The stuff that’s on the airwaves now just makes me want to punch myself in the balls.  It’s so awful.

So to defend some good hip hop and bring back some nostalgia, I’m going to list some of my favorite artists and albums growing up:

Ludacris – Word of Mouf.  Oh man, I had 2 12 inch subwoofers in my Jeep at the time. This album bumped serious bass. “Move bitch! Get out the way, get out the way, bitch, get out the way!” sounds way better than “Take my haannnnnddddd…..we’ll make it…. I swear?” Oh god, I just gagged.

Busta Rhymes – Had a few good albums.  Loved Bussa bus.  Woo HA gotcha all in check!

Method Man and Redman – “Zeem Zeeema who got the keys to my beema?”  Hahahahaha.  Love it

Ja Rule?  Yeah he was corny, but we all enjoyed his jams whether you admit it or not.

2pac and Biggie – No need to say more.  Although I can’t say I prefer one over the other.  I enjoy both as much as the other.

Wu-Tang, Rakim, NWA.  Older but some of the best stuff out there.

Snoop and Dre before they went soft with the mainstream garbage they put out now. Same with Eminem.  Music industry has its way of making the greats bow down and s some d.  Poor Snoop.  Poor Dre.  Eminem.  *sob*  S’ing some D now.

Nas.  Rakim.  LL Cool J.  Mobb Deep.  Heavy hitting.  Loved it.

Remember Ski-lo?  I wish I was a little bit taller, I wish I was a baller…. haha.

Even the Beastie Boys.  Damn.  I really think the 90s were awesome for music.  But of course maybe it’s because I grew up in the 90s.  Anyway, just had a nostalgic moment.  I hope you guys enjoyed the music of that era as well.

If you got some more you’d like to add, please comment.  I think the next time I hear a Bon Jovi song I’m going to hit my head off of my fist.  Really hard.  Ugh.