Trading on the Edge

Stock Paper Trading Ideas

Rahul — Sat, 12 May 2007 14:06:37 +0000

Taking a break from the market for a bit. One is to read some books on money management, position management and systems evaluation. And the other is learn Amibroker for scanning, charting and backtesting needs. Amibroker has an excellent optimize function and I am very excited to use that on my trade history and see what parameters will give better results. One thing I am sure of is that I will have to loosen the stops and increase the holding period a little. Lets see what comes out of it.

Stock Trading Plan for July 13, 2007

Rahul — Fri, 13 Jul 2007 06:43:09 +0000

~ 2% increase in indices in one day. That is a significant move. 1% in one day is fairly significant, but 2% is way out. I think that has got to mean something more than a normal move up. As I see it, it is signaling the start of another leg up from here. Many of my shorts got closed at break even today. But surprisingly, more than half are still open. I will stay with BE stop with them, and see how they fare in this returning strength to the market. I should now look to go long at the next pullback in the market, which might start just tomorrow.

Stock Trading Plan for July 12, 2007

Rahul — Thu, 12 Jul 2007 04:48:56 +0000

So we indeed got a bounce. My holdings did continue there slide down in general or at worst stumbled a bit. So lot of them are sitting with narrow range bars for today. Meaning there could possibly be a reversal if the market strength continues. I should not be influenced so much by one day’s action. I COULD just follow my standard trailing stop rules and let the market take its course. Most of the open positions would be mildly profitable with that. However, if it is a choppy day tomorrow, my positions will get just chopped out with the market only to move again in the direction of my entry. Recent analysis showed that had I let my positions open without stops, I would have made double the money with a flat stop after 20 days. Sooooo, I think I am going to let them move around a bit and just move stop to BE.

Mood towards market: A little apprehensive but not too worried as most of my positions are in the green. It all depends on the market going forward. If it goes into the green, taking out recent highs, I will have to cover all the shorts in a hurry.

Stock Trading Plan for July 11, 2007

Rahul — Wed, 11 Jul 2007 05:56:42 +0000

So, I look at the market midday and it is going so-so. Nothing much just hanging around there lethargically. And what a shock I got when I saw it in the morning. It all came tumbling down. And alongwith it I got 18 open short positions on my hands. Shudder. Very high exposure to real estate sector. But, so it is and I am going to stick with it. Some of the superstars for today missed a fill on the IB paper trade account (CUZ, DFR, NEXC). In any case, lets see how it goes from here. All the indices were down. Do we see a bounce? Or some follow through? I don’t think the drop was that steep to warrant a relief bounce and we are likely to see some more downside action. At least I hope so for my ~20 short positions. LOL.

Mood towards market: Quite upbeat, since I got so many open positions with the shorts. Lets see how it fares if we get a bounce tomorrow. It will all suddenly change and take me to pensive

Stock Trading Plan for July 9, 2007

Rahul — Mon, 09 Jul 2007 14:00:03 +0000

Last week I just took a look at the badly performing industries and surprise surprise there has been such a nice downside momentum around that its unbelievable. In the last 3-4 months I was so focused on longs in the bull market that I had lost sight that I do short trading too. In strongly uptrending market it made sense to look only at longs, but then in a faltering market close to being purely range bound, it does make sense to look at both sides of the market. Now I have so many shorts on my hands that I have no idea how to prune down the list. So, I am going to paper trade the whole load to generate trade statistics to be analyzed.

But then Nasdaq is diverging from the other indices that it might just throw a wrench in my downside momentum party. Let’s see how it goes, but I will go along with these shorts in paper trading until the market takes on strong upside momentum, which it is lacking at the moment.

Stock Trading Plan for July 2, 2007

Rahul — Mon, 02 Jul 2007 13:41:58 +0000

Market is in an absolutely choppy state. Such wide ranges with no movement in either direction just chops the stocks out. I am wondering if I should even try to trade at all during such a time or not. Even paper trade. That seems to be the lazy way out. I think, I should continue paper trading through these times in normal fashion and the results will speak for themselves. Instead of me making judgements about market performance. Based on recent price action, I have just been feeling wether all this time in the markets is worth putting in the effort or not, but hey choppy market action does that. It puts me down. Trick is to weather it.

Stock trading plan for June 20, 2007

Rahul — Wed, 20 Jun 2007 05:33:09 +0000

And everything is stretched, yet again. Looks like the broader market is not giving way at all and is just hanging up there. I guess it will take a decent down day to get some entries. All the consolidation for the last two days isn’t pulling them down enough. And today I noticed HDNG, for which I had opened a position on 5/31. In the glumness of everything going down I had closed that position at breakeven and now look at it; it is up about 10% since. Gotta stick to my guns. My stops are killing me. Have to figure out some way to give the stocks room to keep moving.

Stock trading plan for June 19, 2007

Rahul — Tue, 19 Jun 2007 05:24:07 +0000

No picks for today. Despite a consolidation day today, strangely enough, everything on my watchlist was fairly stretched out and not worthy for expecting entries. One thing that struck to me while scanning the watchlist was that so many of the stocks have made such nice moves in the last 3-4 trading sessions. And that made me think - where was I when they were making these moves? and then I recalled that last week I was a little lazy in making my watchlist and went through only the top 10 industries and skipped the rest 11-20 and ended up having a very small list. I wasn’t exactly lazy. I had let the mood at that time to check myself out of the market. At that time it seemed like that market could continue further down and might be at an inflexion point, and I didn’t want to be caught in the midst of that. But it actually bounced back, leaving me on the sidelines. Strange huh? That market leaves me on the sidelines so many times. Need conviction in my methods…

Stock trading plan for June 15, 2007

Rahul — Fri, 15 Jun 2007 05:52:37 +0000

The market chugged along today. Building on yesterday’s gains. Will it go on to take out recent highs or form a lower top here? We have to take out the recent highs to get back into an uptrend. Until then there is an upbias but we are not out of the doldrums. The market looks short term overstretched to open new positions. Better wait it out along with option expiration. Essentially my mood has changed from grim red to a cautious green. If I was ready for entry on the deep grim red day, today the positions would have been heavily green. Just goes to show that the opportunities to make money are better poised when sentiment is on the extremes. Extreme bearish sentiment in upbias should be taken suspiciously. Maybe the bounce is right there…

Stock trading plan for June 14th

Rahul — Thu, 14 Jun 2007 06:24:57 +0000

Back to regular posting daily thoughts sans charts. I will just continue to journal my thoughts about the market and not worry so much about creating charts unless needed.

So, what difference can one day make in my outlook towards the market. Yesterday it was all grim and dreary. And one day of ~1.5% gains and all is hunky dory? Just yesterday the chart formations looked like they could continue down. And today it looks like a normal pullback from where the bounce is happening. All in all the market is in short term chop territory. But if it continues to go strong from here then, people who were ready to get in today will be handsomely rewarded. I needed to curb this strong urge to make decisions based on extreme sentiment and should look at the bigger picture. Just yesterday, I closed a bunch of positions at break-even or lower just because things looked grim and poised to go down. Had I held on to them today the closes would have happened at much favorable prices. This uncertainty in the market also puts me in a mental state as if I have mentally checked out. And it puts me in a situation where I don’t complete my daily analysis and end up NOT being ready if the market does move the right direction.

Anyway I am going to use this option expiration week as an excuse to take a short break from the daily market analysis.