Ten Quick Rules to Keep in Mind

1.)    Price Pays

2.)  "Every moment in the market is unique"--Mark Douglas (read "Trading in the Zone" ASAP)

3.)    Your opinion about what price “should be” means nothing

4.)   Identify your style and do not deviate from it

5.)    “Play great defense” @jfahmy

6.)  Plan your trade and trade your plan

7.)    Fighting a trend can be painful and dangerous

8.)    Everyone makes mistakes, identify them early and get rid of them

9.)    Hope fails every time

10.) One tick will not kill you

Search for Leadership: Setups in Vices and Cheap Retail

After screening a number of stocks this week and reviewing the stream, there are few quality setups I am noticing in tobacco, dollar stores and a select number of utilities.  Since I always have my eye out for boring D.R.I.P opportunities, here are a couple names I noticed throughout the course of the weekend.

Courtesy of @commavetrader we also have the recent IPO/ couch cushion shopping $DG looking good as well.  Dollar Tree is ($DLTR) is another in the space with strong earnings growth and a nice looking chart.  These aren't necessarily the high yielders as previously mentioned, however price is truth until it is not in my opinion. Other notable mentions in the cheap retail space that look good include $MCD and $TJX.

Although the aforementioned charts demonstrate potential, they are not the most promising areas to find powerful relative strength and strong moves in my opinion.  Granted there are thousands of ways to make money in stocks, however for those on the stream with an interest in monster trends such as those of past leaders i.e.: ($HANS, $CMG, $GMCR, $LULU) $MO, $LO and $SO in all likelihood will not present such leadership.


Depending on your time horizon and investment style, these names may provide opportunity for some.  Others may find opportunity in a 3 or 5 minute chart, given the violent intraday moves we have seen on a regular basis.  However, in my opinion we are still in a challenging environment on a swing trading basis.  There are a number of macroeconomic risks including China and Europe.  Among the areas of death at the moment include the Shanghai Index, Copper, Financials, the Aussie Dollar and steel.  I am not an economist and will not attempt to pontificate my economic views.  I'd much rather observe price and act accordingly. 

Here is what I see with respect to the $SPX…take it for what it is worth.


Good luck out there!

"Remove Your Ego, Do Your Own Work and Embrace Other’s Wisdom"

Being a relatively inexperienced trader I do not believe it is my place to dictate regular blog posts related to my opinion on the market, or pretend to provide expertise on investing.  However, in my opinion nearly every trader experiences moments in their career of stupidity and ignorance.  Regardless of how many times one reads Jesse Livermore, Mark Douglas or any other well publicized trader, we are all subject to times of poor risk management.

Having used social media and specifically Stocktwits for a couple of years now, I have had access to the minds of a number of brilliant traders that are constantly willing to share their insights and trading experiences (i.e.: @jfahmy, @gtotoy, @upsidetrader, @howardlindzon, @stevenplace, @daytrend, @reformedbroker, @zortrades etc. etc.)  During my time using the network, I have learned a number of lessons, such as not to trade in a choppy market, constantly do your own homework, “don’t be a dick for a tick”, define your risk, have a plan, no one cares if you are a great paper trader and play great defense. Each of the aforementioned insights has helped me significantly throughout the early stages of development in trading.

However, since I came into the business in 2007 a significant portion of my career has been in a strong market. As a result I have relatively limited experiences having my patience tested.  Although I was able to identify a recent change in market character relatively early; I made the mistake of thinking I could out trade a choppy/weak market despite there being nearly no setups..  After listening to Joe Fahmy and Steven Place talk a number of times about not wasting psychological capital or financial capital in a weak tape I tried it anyway.  Since I was not able to find quality setups from many equity names, I began to attempt trading other asset classes which were outside of my comfort zone thinking I was Superman.

Instead of being content in the fact that I identified a weak market, I thought I could still pull a few bucks out of it.  Despite agreeing with Reformedbroker’s post related to an idiotic chase for performance, Howard relaying his exits in Apple and Amazon, I still thought I could grab a buck.  Instead of embracing the clear warning signs from my nightly homework and confirmation from, Gtotoy’s bond stock ratio, Zortrades monthly 20 period moving average, Joe Fahmy’s blog, Howard’s non-momentum Monday and Steven Place’s intermediate term change in character, I became subject to a chopfest through a couple of poor trades I made.

Luckily after realizing that I was not Superman, I had a prior plan in place to get me out of these trades.  As a result, I was able to cut my losses at reasonable levels.  However, my need to be involved was stupid and uncalled for. Trading in assets beyond the normal scope of your business is never a good idea.  Although it may not have resulted in life changing losses, I think my stupidity can provide a lesson to many.

As a result, I wanted to make a quick post directed toward relatively new traders to relay the message that you ARE NOT Superman.  You likely CANNOT perform well in most market conditions.  If you cannot find a trade within your area of comfort, you DO NOT have to trade every day.  A significant portion of your time as a trader requires PATIENCE and WAITING.  Also, Stocktwits is a great asset with a number of great traders providing an abundance of information.  Do YOUR OWN work, make YOUR OWN CONCLUSIONS and utilize Stocktwits as a crutch. 

Good luck out there!