Wednesday, November 23, 2011


(This will be a "sticky post" - so I can continually add/subtract aspects and refine strategies as I go)

As you can probably surmise from my previous entries, I've been trading terribly the past few months. My performance has dipped drastically since my hot start. I know I need to turn this around now and make it work or my boss would kick me out. I can't make any more excuses. Redemption is my only saving grace.

I think the best way to start my journey to redemption would be to do a brief SWOT analysis on myself and my trading. Here goes:

- Independent. Doesn't rely on others' opinions or tips.
- Good handle on basics and supplementary techniques.
- Can understand the market movers and catalysts that affect stocks.
- Good quantitative and IT skills.
- Innate interest in the game; willing to learn markets other than equities.
- Has a history of turning things around.

- Lack of discipline.
- Tendency to procrastinate.
- Can be easily influenced by emotions (fear and greed).
- Lack of patience.
- Needs to learn how to properly fuse technicals and fundamentals.
- Negative mindset when losing.
- Position sizing and money management need work.
- Needs to follow through.
- Too competitive (distraction)

- Strong support system.
- Mentors that have a good grasp on the market.

- Constant distractions: Facebook, Fantasy NBA, etc.

Action plans to address weaknesses:
- Lack of discipline: have a plan drawn up the night before which includes stops, targets, position sizing, and all the other essential preparations for the day. During the trading day, if it's not in the plan, then don't execute it.
- Tendency to procrastinate: a list of things to be accomplished should be done every single morning. Reward oneself when all things are accomplished as planned.
- Emotions: stick to the plan in order to avoid freezing,or getting ahead of oneself. When greed/fear/hope strikes, sell/buy a bit as long as it's part of the plan.
- Lack of patience: When there is no set-up, trading is forbidden. Never chase stocks, wait for the pullback or retest. If the stock doesn't, then avoid trading all together.
- Fusion of technicals and fundamentals: READ READ READ. Learn from mentors.
- Negative mindset: Do something that would help fend off negative thoughts, like blogging. Or, play some games that can easily be won, just to boost confidence. In the next trade, trigger the highest percentage set-up that can be traded.

Tuesday, December 8, 2009

Bearish Confirmation

As I implied in my previous post, the simultaneous rallies of both the dollar and equities were quite suspect... and would need confirmation. Today may be the actual confirmation that the environment wherein both are inversely correlated is still intact - as the Dow is currently down triple digits. This is a very bad sign in the short-term, because despite the good employment numbers, the equity markets took a nose dive. It may mean that the economic numbers had already been priced in during the unusual rallies in October and November (both historically bad months), and now, people wise enough to buy during those months may just be selling into the news.

I guess Santa Claus isn't coming to town.

Anyway, despite my bearish feel for equities, there are still a lot of opportunities out there since the markets are still flush with cash. The key, again, is finding the strong issues (ADX > 30).

Friday, December 4, 2009

Dow 11,000?

October non-farm payroll jobs lost went down to -11,000 from -111,000 the previous month - an astonishing number given that the consensus estimated it to be at -125,000. The bullish data may be indicating that the Dow may reach 11,000 in the next few days/weeks. And we can go on even higher if the bearish traders on the sidelines walk their talk and start buying stocks (or covering shorts) now that employment numbers are improving.

What's quite surprising are the simultaneous rallies of both the dollar and equities, which the world hasn't seen in a while. What does this mean? Are we really at a crossroads wherein the inverse correlation between the dollar and equities will soon reverse? Or, is this unusual move telling us that the recent rally in equities is a mere head fake?

No one knows for sure. My stand is neutral. I did say a few days ago that I was already short-term bearish on the markets. But if all the significant indices (Hang Seng, Dow, Shanghai) break out of their patterns, along with a sustained move in the dollar, then I will change my view and be more bullish at least until the earnings season in January.

The Dow entered its current bull market when the dollar started its bear market last March:

Tuesday, December 1, 2009

Philippine Market Tip #2

MWC: Manila Water Corp.

Technicals: The stock has been bullishly consolidating at its highs for the past few weeks, and the MACD indicates (near 0 line) that it may explode soon. Moreover, MWC is a defensive stock, so, chances are, it will hold even if the market crashes.

Entry Price: 16-16.5
Target: 18
Cut: 15.5-15.75

I'm still all-in in MPI so I'm not going to execute this trade. :)