Oh how I wish earnings season occurred more frequently! This morning saw several retailers with earnings; my focus was on DKS and the expected sympathy plays I projected within NKE and FL potentially as a result. DKS, to no surprise, missed and actually guided lower for backhalf, consequently giving them a nice 10% slap pre market. When results come out like this, I like to shift my focus to competitors and vendors that can be impacted by these results and/or potentially be in the same boat but have not yet reported and will undoubtedly get punished as well by the street.
I started in on NKE at 10 am with a fail on the HOD break at 10am.
FL was a bit tougher, I started in at 9:40am, a little earlier than I typically like to but because it had gapped down I thought this could be the end of the winning shorts covering and a potential new move downward. I am glad I covered when I did as this ended up with a bounce and not really going anywhere the rest of the day.
This was probably my best play of the day and the one I am most proud of my execution despite the low volume when I started into the trade. I had started very small into this short yesterday, given the extended nature of the daily chart. My intent was to build into any move up, with a full stop over yesterday’s high. I was looking to add and reduce stop with any large move and confirmed trend direction under vwap but it didn’t happen during the morning session. I piled in pretty aggressively at 10am as it seemed to be hesitating a bit and was not getting much of a bid, so I thought this might be the moment. I ended up with an average of 49.08 on some decent size, so when that stuff back to vwap happened I took no chances on a potential rebounded as this ticker has done lately and took 2/3 off the table.
Please finish this quote for me and then we can be friends. I kid, kind of. The more I trade, the more convinced I am that it is Poker’s twin. One of my all time favorite movies is “Rounders”. I won’t even begin to lay down some of the worthy market related quotes that are absolute gems in this movie. But I will slide this one in front of you: Continue reading “If you can’t spot the sucker in the room…”
So, this weekend I went to my favorite quiet beach and had a serious talk with myself. You know the kind of talk that I mean? I have had an incredible first 5 months as an independent trader, it has far exceeded what I had expected or hoped for but last week I seriously felt like a maniac trading. I feel blessed I ended solidly green but felt so trashed and beat up as if I had ended red. The opportunities and ranges this market is giving is incredible, however at the end of the day what has gotten me to where I am is trading less quantity and more quality. Continue reading “Day One”
How does that song go..”time just keeps ticking, ticking, ticking…into the future”… Amazing that we are already into August, but excited to see the beginning of fall trading and earnings season as a full time trader now. Let’s go! Continue reading “Keeping Losses Tight”
Earnings season is in full swing right now and I am amazed every day at the ranges in so many names! It is a bit challenging to not have some FOMO but at the end of the day what has been working for me is the same thing that has always worked. Focus on a few and follow my rules.
Sweet, sweet AMAZON…
This came courtesy of Nate in the Investors Live chatroom. Absolute unreal trade! It had been on my radar to watch for this setup, so when Nate posted, I didn’t hesitate to hit the sell button with my normal starter position on a stock with that pricing. While I didn’t have the opportunity to add, I covered for unreal gains with a trailing stop on the 5 minute chart. Just amazing…and incredibly happy I stayed focused and didn’t let my PNL shake me out. Specifically not looking at my PNL has, without a doubt, been the largest contributor to some of my most successful trades this year, it enables me to trade the ticker and focus on the play, not the $$$$’s.
My favorite type of play and other large win this week came via FCX. The daily produced a beautiful market candle that showed some serious conviction on the buy side and open air above on the daily, so I was on full alert for any washout buy opportunity. It opened weak and I waited to see if my favorite setup would develop. The market awarded my patience with a solid r/r setup and I took the trade for a solid payday. Above anything else, both of these trades show the power of patience! Not every trade goes this smoothly and there are times when being patience results in leaving some money on the table but when the market is showing conviction in its movement, it is truly invaluable to let the trades ride.
Me on Monday. I had a streak of 4 weeks of GREEN days and fell flat on my face on Monday. So, what went wrong? Pretty simple explanation:
I IGNORED MY RULES.
Silly, really. Two big rules that, when ignored, will slap you upside the head every time a trader tries to think they are better than them.
- Fighting trend above VWAP
- Starting said position with too big of size
While it definitely didn’t make my day, I walked away from my computer ok with a little humbling. I know that it is extremely rare for traders to be green every day and knowing that, I am very proud of my performance in the past month. Additionally, I think this was a good little slap to make sure I am not becoming complacent.
“Comfort breeds Complacency”
Happy to say I bounced back in a major way on Tuesday and had a killer day today with VRTX. What a fade! I started in on this in pre-market and stayed until 3pm. Unreal $10/share! Really happy with how I traded this one. I was adding/taking profits….snoozing because this bled the slowest I have ever seen. Really wanted to see massive panic for whatever reason…but I am not going to complain over this move. It is high on my watchlist tomorrow morning, I hope it opens slightly higher for a continued fade, ideally with some panic this go around.
The more time I spend studying and trading the markets, the more I realize how the lessons in trading are so correlative to other routes one can take in their professional lives. As I think back over my previous profession, I realize how profound some lessons were early in my career and how they provided the path to becoming what I excelled for nearly 20 years. Continue reading “Advice from the Poker brat”
One of my favorite quotes from quite possibly the most thought provoking books I have read in a while. Provocative for traders as well as life in general, if you haven’t read “The Slight Edge” by Jeff Olson, do yourself a favor and pick it up. Continue reading ““Sometimes you need to slow down to go fast.””
One lesson that has really resonated with me lately is the power of starting small. One of the bad habits I am working on breaking is starting too large of size prior to actual confirmation. Stocks with tremendous range do not actually require large size to produce large gains and I find I keep myself in trades when the size is smaller. Funny how that works?! Staying disciplined with this new strategy is proving itself within my winners and I am looking forward to seeing what this does to my win/loss ratio and subsequent size of winners relative to my losers.
Continue reading “Simple disciplines can move mountains”