VRUS 15m
2011: Rebuilding My Battered Account
- Thread starter neke
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AMSC 15m
It would be all very logical if that was the case. I cannot find any phase III news on VRUS. All I saw was that they made a presentation at a conference, I'm guessing there were just many buyers with big wallets and "Dr. " before their name. Generally FDA news release times aren't pre-announced.
I see no problem with either of those charts, the timing was obviously off as Neke has said, but there were opps to short AMSC and VRUS intraday. It was not a MOO short and MOC cover trade defintely, but one could have done if one stayed nimble.
Now to Neke, an observation: You may want to try and look at your P&L as you posted as an indicator of sorts for your mental state. What I mean by this is see how you were feeling at points on that P&L and see if your current state of mind is close to it. Every trader, automated or discretionary will feel a certain way to LARGE swings in P&L regardless of experience. These are points where you'd want a self imposed emotional stop loss.
Now to Neke, an observation: You may want to try and look at your P&L as you posted as an indicator of sorts for your mental state. What I mean by this is see how you were feeling at points on that P&L and see if your current state of mind is close to it. Every trader, automated or discretionary will feel a certain way to LARGE swings in P&L regardless of experience. These are points where you'd want a self imposed emotional stop loss.
I have to agree with VRUS being a shorting disaster, not only because of recent news (price target raised to $104 a couple days earlier), but the technical price action was pure long signal. Priced gapped up in pre-market from the previous day which closed near all-time highs, then price ran from the open without a single tick of hesitation and consolidated in a narrow range at the opening range high. Buying anywhere in that narrow range, or buying the break out of the range with a buy stop was a very high probability trade based on that opening action. Everybody long VRUS was profitable and the price target is now $104. There is no fundamental reason whatsoever for price to drop, and technically there was no short signal the entire day.
AMSC would've been a good short if it hadn't already fallen so far in pre-market and had a 23% short interest. I'm sure the dead cat bounce was all short covering and retail RTM traders, because asset managers wouldn't be buying AMSC as an investment on that kind of news.
When I see stocks hitting the hi ticker over and over again in the opening half hour, I take that as a long signal and I'd be looking to buy any pullback pivot or a break through a previous high.
AMSC would've been a good short if it hadn't already fallen so far in pre-market and had a 23% short interest. I'm sure the dead cat bounce was all short covering and retail RTM traders, because asset managers wouldn't be buying AMSC as an investment on that kind of news.
When I see stocks hitting the hi ticker over and over again in the opening half hour, I take that as a long signal and I'd be looking to buy any pullback pivot or a break through a previous high.
Every time I think I am out, they pull me back in.
I have to opine one more time, just my 2c.
While, of course, there is a possibility for VRUS to come down, it will take not days but weeks or maybe even months to see some pullback. My problem is that Neke entered as intraday trade, or at most for day or two. I apologize if I am presuming it wrong, but that's the pattern of his trades. To me it was obvious that that instrument is not coming down in a short amount of time. I actually was looking into 1min chart while trying to locate the entry price level, but did not pay attention if there were any intraday opportunities on the short side. For something like that you have to be super-cobra-fast and probably would be forced into scalping, because the upside action was so forceful. This would be very tough and bad way to try to make some money. He said as well that it was auto initiated, where I still remain very much puzzled about the rules of that strategy. He admits the second part was prime example of imposing own will on the market participants (âfaded an over-extended moveâ).
As far as AMSC, again IMHO, a big mismatch in timeframes. It seems to me Neke is applying long-er term analysis to short-er term playground. After such a huge move (50%) usually (unless flash-crash or earthquake) people need some time to settle down. Intraday was clearly cautiously long, with your finger on the get-out button, a typical dead cat bounce.
Anyways, I still believe the break is the best option for Neke. In one of his replies, he dismissed the value of taking a break and said he has to work it through. I do ultimately agree that you have to work it through at some point, but it's been more than a year since no progress in his trading. Same old same keeps coming back, bad risk management and wrong trade decisions, against the present will of market participants.
Neke, you have to take a break and reflect on your issues and then come back and work it through. I am not dismissing the possibility that you can continue and survive like this, but surely you are taking a tough road to get there.
Without trying to preach and convert (you or anybody else on the forum), I will suggest again that you should try to adopt price action chart analysis in some form. Find something you are comfortable with.
Here is the rationale:
My thinking about any financial instrument is generic. I do not trade stocks, and my thoughts about those two trades are rather generic. I find fundamental analysis dangerous in a sense, it pits your personal opinion against market participants actions. You are trying to predict what will market participants do. Because you can not get their book (well, some people can, please stand up), you are essentially trying to read their minds and intentions. Of course, no market participant wants to reveal intent to buy or sell, and there is fair amount of deception. You get the âbla.blaâ news suggesting this or that, topping everything with some âbla.blaâ technical indicator showing the instrument is overbought. Next, it stays overbought for days and months, until you are bankrupt.
Real life example:
While Paris Hilton's assessment is that Louis Vuitton bag is worth 5K, mine is around 50 bucks. Louis takes an opportunity and keeps selling the bag for 5K to the willing market participants, while I keep arguing contrary. For the record, I really believe it's worth 50 bucks. But they really don't care.
Same thing for gold and many other instruments at present time and throughout the history. Maybe I do have an opinion if gold is overbought or not, but I do not trade on my opinion.
What you can do about that?
If you don't have the financial power to move the market (you and me obviously not in that category), you have to follow the market participants that do have the power. What they can not hide is the aftermath of their actions, which you should be able to clearly see on the chart. There is no reason to keep guessing in advance, there is plenty of opportunity to follow up closely.
By the way, you didn't even guess in advance in case of VRUS (before the move), you just stepped in front of the buying crowd and, representing the irrelevant amount of volume, got steam-rolled. The reason why there were buying and you think they shouldn't? I guess some âbla blaâ news or âbla blaâ indicator... well, I don't care and you can keep arguing.
Applying this to the AMSC trade: if you were not already short by
a) being in possession of the information that caused the big move, prior to the move or
b) performing some kind of analysis and guessing right to be already short
the best action was to not get involved. Short people were good and they were taking some profits, so you could (cautiously) nibble on the long side for the short period and that's it.
Far away from being the sharpest pencil in the box, it's an ongoing battle for myself in applying those principles: don't guess and most of all don't argue the market participants. Side yourself with the winning crowd. In many cases, easier said than done, but those two were quite obvious.
All the best.
I have to opine one more time, just my 2c.
While, of course, there is a possibility for VRUS to come down, it will take not days but weeks or maybe even months to see some pullback. My problem is that Neke entered as intraday trade, or at most for day or two. I apologize if I am presuming it wrong, but that's the pattern of his trades. To me it was obvious that that instrument is not coming down in a short amount of time. I actually was looking into 1min chart while trying to locate the entry price level, but did not pay attention if there were any intraday opportunities on the short side. For something like that you have to be super-cobra-fast and probably would be forced into scalping, because the upside action was so forceful. This would be very tough and bad way to try to make some money. He said as well that it was auto initiated, where I still remain very much puzzled about the rules of that strategy. He admits the second part was prime example of imposing own will on the market participants (âfaded an over-extended moveâ).
As far as AMSC, again IMHO, a big mismatch in timeframes. It seems to me Neke is applying long-er term analysis to short-er term playground. After such a huge move (50%) usually (unless flash-crash or earthquake) people need some time to settle down. Intraday was clearly cautiously long, with your finger on the get-out button, a typical dead cat bounce.
Anyways, I still believe the break is the best option for Neke. In one of his replies, he dismissed the value of taking a break and said he has to work it through. I do ultimately agree that you have to work it through at some point, but it's been more than a year since no progress in his trading. Same old same keeps coming back, bad risk management and wrong trade decisions, against the present will of market participants.
Neke, you have to take a break and reflect on your issues and then come back and work it through. I am not dismissing the possibility that you can continue and survive like this, but surely you are taking a tough road to get there.
Without trying to preach and convert (you or anybody else on the forum), I will suggest again that you should try to adopt price action chart analysis in some form. Find something you are comfortable with.
Here is the rationale:
My thinking about any financial instrument is generic. I do not trade stocks, and my thoughts about those two trades are rather generic. I find fundamental analysis dangerous in a sense, it pits your personal opinion against market participants actions. You are trying to predict what will market participants do. Because you can not get their book (well, some people can, please stand up), you are essentially trying to read their minds and intentions. Of course, no market participant wants to reveal intent to buy or sell, and there is fair amount of deception. You get the âbla.blaâ news suggesting this or that, topping everything with some âbla.blaâ technical indicator showing the instrument is overbought. Next, it stays overbought for days and months, until you are bankrupt.
Real life example:
While Paris Hilton's assessment is that Louis Vuitton bag is worth 5K, mine is around 50 bucks. Louis takes an opportunity and keeps selling the bag for 5K to the willing market participants, while I keep arguing contrary. For the record, I really believe it's worth 50 bucks. But they really don't care.
Same thing for gold and many other instruments at present time and throughout the history. Maybe I do have an opinion if gold is overbought or not, but I do not trade on my opinion.
What you can do about that?
If you don't have the financial power to move the market (you and me obviously not in that category), you have to follow the market participants that do have the power. What they can not hide is the aftermath of their actions, which you should be able to clearly see on the chart. There is no reason to keep guessing in advance, there is plenty of opportunity to follow up closely.
By the way, you didn't even guess in advance in case of VRUS (before the move), you just stepped in front of the buying crowd and, representing the irrelevant amount of volume, got steam-rolled. The reason why there were buying and you think they shouldn't? I guess some âbla blaâ news or âbla blaâ indicator... well, I don't care and you can keep arguing.
Applying this to the AMSC trade: if you were not already short by
a) being in possession of the information that caused the big move, prior to the move or
b) performing some kind of analysis and guessing right to be already short
the best action was to not get involved. Short people were good and they were taking some profits, so you could (cautiously) nibble on the long side for the short period and that's it.
Far away from being the sharpest pencil in the box, it's an ongoing battle for myself in applying those principles: don't guess and most of all don't argue the market participants. Side yourself with the winning crowd. In many cases, easier said than done, but those two were quite obvious.
All the best.
Thanks for your charts and input. For VRUS, the move has been underway for a number of days. After several days I am probably looking for an over-extended move that would correct in the short-term not initiate a long position. Obviously we don't have to see things the same way; I would not be trading something if it had not proven good (at some point). Well if those days are over, it will be shown with time. I have to confess though that my automation is solely pure contrarian: I am looking to add some momentum type to the mix. Part of my discretionary strategies is going with credible strength (close to the start of the move). I would never go with a move that has been underway for days.
On AMSC. It was in AH when I saw it at 14.80 (Tues night) and wanted to short, decided I need to see some dead-cat bounce on Wed. Well it opened at 13.00, and took too long to get to a level I should have shorted. Unfortunately did not wait that long, shorted at 13.70 (first initiation) and covered at 15.17 on pain. Should have been a trade to avoid, since it did not do what I expected within the expected time-frame.
People make money through RTM and through going with trend. I think it is presumptuous (not directed at you) to post a chart and think every intelligent person should see it the same way. Like I said not everybody swears by charts.
neke,there is a belief in trading,you're a fine example of it,that making money is easy and i can always get it back,there is another gamblers beleif in trading that,'i'm a winner and it will come in because i willed it,in gambling you are stuck with the cards dealt,in trading you can stop yourself out at any time and get back in at a better price,in gambling you have to take the loss and work your way back,in trading ,if you stop yourself out and get back in ,your losses are smaller when wrong and you get to keep more,you never have to work your way back,you just keep adding,sometimes small ,sometimes big,but always adding,you have to get rid of the ...it'll come in because i willed it...i'm right most of the time...i'm...and trade.. it 's... going the other way and it's time to limit the loss...stops are a huge advantage in trading that a gambler doesn't have ...use em
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