Weinstein Trading and Fading

Quote from Love Trading:

Hello Robert,

Fading is a valid strategy, and it is also more than 50% of my trade. However, averaging down is a loser's game. This kind of cost basis thinking is fatal to a trader in the long term. The simple truth is that the larger the loss, the more difficult to cut, and we NEVER know what is too high or too low. The only sure thing is the market can do anything at any moment.

Happy holidays to you and your family and hope the new year will bring a better year for you!
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Hello Trading,

Yes In most I agree. In fact that is why I did exit and did not hold out until Monday. I had a valid signal and I went large with it and granted I did not exit at the point I should have (and not happy with myself about that) I did exit after the signal was proven wrong.

This trade did not work out but I still look at it and feel that the odds where in my favor and when that is the case I think its ok to push it. Better to push hard when you have the advantage but of course that does not mean its going to be a winner as this shows.

Have a great end of the year and thanks for taking the time to post.

Respectfully,

Robert
 
Quote from jack8031:

Robert happy holidays.Hope next year will bring more joy and more wealth for you.Please try to contain your drawdowns and you will be fine.---jack:D :D
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Hi Jack and same to you. I hope next year is your best yet!!!

My drawdowns are the visual and public part of my trading but its the entries that usually get me in the problem area and having the ability to take a stop loss that is small is required 100% of the time not 99% as I have shown. This is for sure the most front thing in my mind with trading.

Happy Holidays

Robert
 
Quote from vhehn:

robert. a friendly word of advice. this fighting the market and getting steamrolled kind of trading will eventually take an emotional toll on your ability to trade that will be hard to repair.
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Hello Vhehn,

I agree. I think the hair that was once on my head and is now in my bathroom sink agrees also.

I can say that I have improved in this area but I am not there yet. Its a demon that I fight with a lot.

I have trades that work great as fades and those that should be stopped out quickly when wrong. my biggest problem has been mixing the two (thinking the fading will work on a non fade trade)

Based on the criteria SNDK never became overbought intraday. As such there was no intraday reason to believe that it would retrace. My WRONG conviction was that with that many days up and that big of a percentage in the last three weeks the odds favor a retrace of at least one day. I suspect that when it does it will be more than one day and it will close near the low of the day its down. obviously I was wrong about WHICH day and maybe just wrong about this in general with SNDK.

Hopefully I will start Monday as a better trader due to this experience. I have been very optimistic about trading lately as some new signals are really working out well. (other than the short I did late today with SNDK it never actually gave me a short signal)

So in the end SNDK has once again allowed me to know that I suck as a discretionary trader. When I stick with the plan (which I have in writing ) I do great and when I move away from that I do poorly. Of course that needs to be balanced with the fact that all my signals where at one time discretionary that became written rules. Maybe next time I see this I will be able to take it long and make some nice gains. This is what I did with gap ups at the beginning of the year. I was getting killed but was able to take all that was learned and build a solid gap up trade signal that produces very nice gains with very little fading or pain.

Have a great weekend and happy holidays to you and yours

Robert
 
Quote from Xspurt:

From time to time I look in here to see how you are doing and always hope for the best. You are brutally honest and that appeals and you sure stick your neck out. Here's my suggestion re. SNDK.

Bob, you need to step back and look at the bigger picture. Sure SNDK has had an unusual run up, but on the weekly chart it isn't even tired yet.

On the daily it's repeatedly opening gap up and 30 was a major resistance. Poking through 30 this thing could easily test it's all time highs if it breaks 33.50.

Looking at the 30 min chart I see the same as the daily and weekly - exceptional strength. It's broken up through a topside trendline in the last half hour. Trying to fade momentum like this is strange when you are missing screamers to the long side.

If you were to add long signals you'd kill this market but you are too narrow in interpreting what you see.

But I wish you all the best for Monday, Xmas and good things for 2010.
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Hello X,

Thanks for taking the time to post. I believe you are SOOOO right. I took a look at the weekly today (something I should have done two days ago but I don't normally look at weekly charts when the MAs are moving higher)

Once I looked at it I said "this damm thing isn't oversold at all". To say I felt stupid at that moment would be an understatement and I started to really look for the exits. As bad as this trade was it could have been worse because I started to cover pretty aggressively before it broke 30 (still way to late I know)

It was also after looking at the weekly chart that I didn't add any more to the short until after I had a valid short signal.

I have once again added long trades after a long time of avoided them. About two or three weeks ago I started regularly trading to the long side and I do hope that I can capture some of the trades on both sides. So far they have worked out well but I have taken it pretty slow. Being short is a lot less risky in my opinion and especially so with overnight holdings. ( i lived and watched the trading in 1987 and 1989 and 2001 and all the mini ones in between)

Thanks again and the very best to you in closing out your year and I wish you a great 2010!!

Robert
 
Quote from retaildaytrader:

Here is your mistake with Sandisk. December and January are the two strongest months of the year. Technology related issues seem to outperform during those times.

My expectation is that at some point in the next 2-3 weeks San Disk will indeed be a sell falling a good percentage very fast. Same with Apple and Goog.

Right now, there is lots of good spirit with the holidays and trying to fade such picks before Christmas is foolish. However, after Christmas is a whole new ballgame. I am shorting Goog and Aapl at the present time with tight stops. If my stops go off, then I will eagerly wait a few more days and see where I can start shorting again.

Traders know that technology will become a sell between now and mid-January. Its tough picking a top, but someone has got to do it.
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Hello Retail,

Thanks for your post. I can't any thing you said is wrong but I will say that there was a bigger mistake with SNDK that I made.

I should NEVER had been in the trade to begin with. Was not a written down signal with rules. I allowed myself a discretionary trade and then allowed it to be a fade when it never signaled that it was overbought intraday. I knew better then to be in it and yet I did short it. Those slow non stop moving stocks can go on forever it seems and I totally forgot that I can't just trade a stock because I "think" it looks like it will turn around.

I would be willing to short SNDK again in a heartbeat if it gives me a short signal but until then I think I will be done with it regardless of the month we are in.

Best to you and yours and I hope 2010 proves to be your best year yet

Respectfully,

Robert
 
Bob

Great journal as many has mentioned before
and hope i can contribute.
Drilling down into industries will show that SNDK has been in one of the hottest industries for the past year.
Semiconductor memory chips. Notice
one day(12/24)...+3.5%
1 week...............+16.4%
1 month.............37.4%
3 months...........32.%
6 months.............+87%
and 1 year.......a wopping 196%
SNDK is outperforming it 's industry by about 100%.
There must be easier shorts out there
DeMark's method will not work without the vigorous use of filters
The site below has been a great aid in my years of trading and may be of some help as a filter
http://finviz.com/[/url]
cheers john
 
Quote from Deadwood:

Bob, I've read your post for sometime with interest because I was right where you are now. I know you don't want to hear it and nothing I say will convince you but my trading changed the day I realized a few simple things.

1. "signals" are stupid and no real traders that I know of making consistent returns use them. Instead they view signal followers as the poster childern of naivety.

2. Trading a stock when you don't understand whats driving the price action almost always ends badly.

3. Trading a stock that isn't acting the way you think it should almost always ends badly.

4. Shorting weakness is always better than shorting strength when it comes to hitting a runner. For example, you don't go into a SNDK until the mo-mo breaks (assuming thats the reason for the run in the first place).

5. You can't make 4 $15 gains and take 7k losses. Frankly, a $15 trade isn't a winner, it's a breakeven. So is a $200 or $300 trade if your taking 7K losses as often as you do.

6. Adding to losers is almost always a bad idea unless you really understand the company.

I wish you the best
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This was the best advice by far given to you that I've read amongst those who posted recently here. Perhaps there is a reason why it is the only one you did not reply to directly.
 
Quote from illiquid:

This was the best advice by far given to you that I've read amongst those who posted recently here. Perhaps there is a reason why it is the only one you did not reply to directly.
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I agree with you, illiquid. Deadwood and yourself are very different from 95%+ of the traders here. You guys are at the level where I wanted to be.

PA
 
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