Weinstein Trading and Fading

Hi Robert,

I am not a profitable trader, but I just have some questions:

1) Why not trade bigger time frame?
2) Why not scale in and out?
3) Why not find a more liquid market?

PA
 
Robert,

I do not know what your strategy is but most of the time you can have a fantastic year when you erase the big losers.... it is not good for your psyche to dig such a large hole and then work your way with small size out of it! Instead fo continuing to sell more and mroe shares as the price moves against you .. you cfould just get out of the trade and re enter later.. you are still averagin down but you are not taking on extra market risk. I average losers all the time and it works great especially in shorter term time frames.. but i got my big loss by adding to the ung form 14 to 11.50! and it was a big loss... i was in that trade for 60 days and i realized that it was a terrible trade. Someone on this site told me in a post.." there are better uses for your capital that will return more money faster than ung" i laughed it off.. guess what.. i should have listened... it was my cocksureness that got me in trouble.. i did not want to take the loss! i am not agaisnt throwing good money at bad if ti makes sense, but sometimes the best thing to do is just get out.. the sense of relief once you exit a losing trade is amazing.. even if it is a big loser.. anyway.. good luck...
YOU SHOULD LOWER YOUR SIZE TO THE POINT WHERE YOU ARE COMFORTABLE NOT USING A STOP!
 
Started trying out a couple of new setups today. lots of 100 share lots and turned out ok. No big gains or lossers.

I worked until late last night looking at SEED and the placing of orders in general. i created a spreadsheet of entries that I had been thinking about doing for over a year but had trouble finalizing the details. i went ahead and wrote the spreadsheet the calculates the entries and while not fully done does do what it needs to in a manual type of way.

I have protections to avoid thin stocks BUT I found a hole in it. It uses (or used) the mean vol average. in the case of SEED the mean was raised way beyond the median by the outlier of yesterdays trading.

That along with a change in the scaling in of trades would have avoided that mess. (along with some others but probably not all those in my future...)

Traded some gap ups and the rest are based on breaks in the trendline some fades and some trending. One other trade was the SEED options that I wrote yesterday and faded again at the open today. That turned into todays best trade but still small.
now flat
Seed jan 10 calls + 139
MDT gap up + 96
DLTR gap up + 94

rest are based on fades of false breakouts or trading the trend of valid breakouts
WERN – 5
SQNM + 13
JCG (afterhours, faded and then put a stop loss next to BE which was hit) + 1
GE + 3
CEDC be
BX + 15
BBY + 3
AMZN – 40

+ 324
- 11615
 
Quote from nesyo03:

I respect everything you've done Robert, but I do not know how to say this another way.

Haven't you noticed the trend with your strategy? Sure it can work quite often, however when it doesn't, it wipes everything you've made and sometimes more. I am curious how many more blowup days you are planning on going through before contemplating a new strategy with a "safer" risk/reward.

This journal is the only one I actually check in on most days just to see how your strategy is coming along. I've traded the way you do, and have been burned like you. But I realized its a losing strategy in the long run and changed strategies and have not looked back since. I wish you the best and I am only trying to help a fellow trader.
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Hello Nesyo03,

Thanks for reading my journal and thanks for taking the time to post.

Yes, I have taken notice of the problems with my strategies....

You are right that when it doesn't it does wipe out huge amounts of gains. So often though the problem lies not with the strategy but rather with my abilities. I should have traded SEED differently (not because of the results but based on what I knew at the time)

I am working hard on several things, one is to be able to enter in a stock symbol and a price into a spreadsheet and have it calculated all the orders (both entry and exits and then adjust exits based on the entries) with IB. If anyone knows how to do this please PM me.

I have also taken away most of my discretionary trading and that has really helped. SEED was a breakdown in my trading due to several factors, one not having the needed shares (I knew this in advance so I should have not traded it) to not taking the loss (about $1500ish) when I really thought it was as good as it was going to get (and it was)

Otherwise I feel that in the last three months overall I am a better trader than I was at the start of the year and I am still up for the year so its not quite the car crash that it might appear. even for this quarter I am near even.

I also wish you the very best in trading and the coming holidays.

Respectfully

Robert
 
Hello David,

Thank you for your post.

I agree that trading is about finding market direction and when the buying pressure does not match the selling pressure is where we find opportunity.

I do not share your thoughts that my ego is too strong (although maybe that in itself means your correct) as I think having a strong ego is a vital part to being able to trade correctly. Its keeping it in balance with discipline that makes it all work. Having the ego to stay the course and the discipline to exit when the plan does not work as originally started.

I did give some consideration to the fact that IB was very low on SEED inventory to short. I had been down this road before and I know that if I can not execute my plan correctly things fall apart quickly. thats what happened here and I doubt that this will "get me" again in the same way. I may learn slow and I may find every possible way to screw things up but I do learn and I do make lemon-aid sometimes out of the lemons.

Actually my Gap up signal has done very well since I "perfected" (in the sense that it works, not that its perfect) it. In the last six months I have used it almost every trading day and there are only two or three trades that I have lost with. SEED was a new one is that the volume in an average 10 min bar was greater than the average daily volume and thats where the fog of war cost me. I did not know this going into the trade (could have but only looked at the average MEAN and not the median which would have made all the difference in the world)

Once again I traded to gap ups and while small (only due to the size limitation I have now imposed on myself) they made money and had very little 'pain' before turning into a gain.

Thanks again and I would like to wish you and your a very happy Thanksgiving

Robert



Quote from trader_david:

gap up is not the signal to go short. 50% gain or 100% rally is not the signal to go short.

trading is all about inequilium between buyers and sellers.

SEED was trending very well today. I will look for support to buy in this kind of runaway crazy market.

your ego is too strong. before the market, we as a trader, need be humble, we must know when we are wrong and negnate our wrong view, reverse ourself and befefit from the market.

you are afraid of "no shares to short". I have this experience, back to 2005, I remebered I was shorting CAAS, scottrade (at that time I was with) just had 500shares when I decided to go short, so I naiively toke the short, CAAS went from 6 to 8, then 9, and I tried to short at that price, scottrade killed my old short becuase it met scottrade's short selling margin limit(over 20% or 3 dollars, I do not remeber, they will kill it for you), I was mad, lost $1.6k+, glad they do not have shares for me to short in the rally, otherwise, I got the same results as you.

you need think in a little bigger picture, one day's rally is just a tiny bar in a monthly chart. if seed shoots another 3 points tomrrow, it will not be a surprise, just a tiny bar!

if you just trade intra-day chart, then must define your timeframe within 5minutes or 1 minutes bar, if how many bars passed, the market is still not in your favor, that means yoour trade is invalid.

good luck
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Quote from beginnerjohn:

Trader David
I can assure you that Robert has been around longer than you in the trading realm. Your post I find a tad insulting to the man.

However I will give you the benefit of the doubt that English is not your first language.

So go back and Read all of Roberts posts over the years and you will see he is a professional. In fact you can see this from his last post on this journal...

All the Best

John
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Hey John,

Thanks for going out of your way to make a post here again.

Its been quite the ride this year. I sometimes feel like Thomas Edison must have felt going about trying to figure out how to light it up. Its easier to find all the ways that it doesn't work.

Either way we have to get out of bed and try to use selective aggression in grinding out a gain in the market.

I hope the market treats you well as we go into the final trading days of the year

Happy Thanksgiving to you and yours

Respectfully,

Robert
 
Hello David,

Well welcome to the party and glad you could make it. In a few days it will be a year.

I think naturalized citizens are great. These are people that are Americans not just because they were born here but because they made a choice to join in on the fun.

While Japan and much of Europe is looking at a population implosion we are humming along with new people and new dreams.

Maybe its late but I didn't think to myself that English was your second language by your post.

I don't feel offended and your comments are welcome. We may not agree with everything but I will say that SEED is not a trade that I am proud of.

Sometimes I trade very very well and believe I can make a lot of gains and sometimes I think I belong on yahoo finance for the crap I do.

I think its going to take some time to get my footing back after losing it this summer but I can see in the things that I do I am actually coming back and things like SEED are decreasing in frequency.

Best

Robert



Quote from trader_david:

I am a naturanlized u.s.citizen just last year x'mas. English is not native language. that is true.

but that does not mean in trading I am not good at. I traded 5 years+ so far, I struggled two years, then from third year I started to make profit. this year I was down before july because I switched to Future trading, did not get the idea of high leveraging trading, I overtraded and lost, . then I turned around from this september, I traded with patience and discipline, I almost doubled my account this year.

I know Robert has lots of experience in trading, but yesterday's results prove he is still an amteaure, sorry, Robert, if that offends you, please accept my apology, I really want to help you. a trader need think out of the box and think in the box.

when in a trade, think outside of the trade. when not in a trade, think in the trade.
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robert,
a serious question.. how did you even find SEED?
a stock screener, a friend, a news article?

and is this how you find most of your stocks?


I have had success by trading from a list of 20 -30 stocks that are always the same 20 -30 stocks.. that way i get very comfortable with how they are going to act and react and i know when they are "out of line" which can be exploited to make good trades. Maybe this is the one thing you are doing incorrectly..

idea.. pick a few stocks based on .. excellent volume, and the volatility or "true range" DAILY that you like and make a list.. study the list going back for months on daily and weekly charts... get a feel for them man get a feel...

jack of all stocks and a master of none! i think this is exactly what you need..

master 20 stocks in different industries or sectors and you will always find an opportunity staring at you! Master these stocks and you will have the confidence get bigger size than you ever imagined
 
Thanks Robert

Have a happy thanksgiving with your new family mate.

All the best
John
Quote from Robert Weinstein:

Hey John,

Thanks for going out of your way to make a post here again.

Its been quite the ride this year. I sometimes feel like Thomas Edison must have felt going about trying to figure out how to light it up. Its easier to find all the ways that it doesn't work.

Either way we have to get out of bed and try to use selective aggression in grinding out a gain in the market.

I hope the market treats you well as we go into the final trading days of the year

Happy Thanksgiving to you and yours

Respectfully,

Robert
More...
 
Fading strong moves isn't, in and of itself, a poor strategy. Robert has demonstrated its profitability over long stretches of time.

IMHO, though, there are some fundamentals that need to be considered before choosing to fade a strong move as opposed to waiting for a lower high/higher low: the nature of the news, short interest, how far the stock's price is from all-time highs and from 52-week highs.

SEED, for example, gapped up on fundamentally excellent news.

USG from back in Sept had very high short interest.

When AIG first started its string of breakouts, you're looking at a stock that in 2008 traded near $1500 a share (split adjusted), plus the 20:1 split made the squeeze potential huge.
 
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