Weinstein Trading and Fading

Good job Robert. What people don't seem to understand is that what Robert does makes logical sense. Lets say I am an investor and owned NUVA waiting and hoping for good news. Good news comes out, and the stock spikes over $ 10/sh with my cost basis at $ 30/sh. I would at least sell some of my profits on that spike even if I felt more good news was coming.

Robert gets a technical signal to take the trade and short the spike. He then manages the trade correctly and gets out with a profit. I expect from back testing, this type of trade may have at least a 65% probability of success.

The only thing needed, is to be able to take a psychologically take a loss when the trade does not work out, and the stock keeps going up.

Why would the stock keep going up? The reason is if the news is a game changer. For example, BIDU kept going up since GOOG was basically saying it was getting out of their market. So the news created a tidal wave trend not just a spike. Also, you do have shorts fighting by averaging losers into this tidal wave instead of being able to recognize the difference.

So even if one does not have the ability to recognize the difference, having a stop and honoring it, can provide the money management to succeed and prevent wipe out as the tidal wave hits you.

Quote from Robert Weinstein:

Traded well today and this week and I am pretty happy about that

This week was about trading only signals and as the week progressed I was on target and really making progress to getting it all back on track.
I would even go so far as to say that my discipline this week has been the best it has been in months and I even had a few lucky breaks (I don’t actually believe in luck) that made the week good.
On Wednesday night I took a look at the B8 signal in light of MIL on Monday (I didn’t trade it due to being out of the office “lucky”) and knew that I needed to have some type of method to filter for super large news breaking out during trading hours. I have been through them before and normally come out on top but why go for that type of ride if it is possible to avoid it. So I spent about 6 hours going over different methods of filtering that would not curve fit any more than 1% of other trades. Sometime around midnight I had what I thought would work. Little did I know that just two days later I would get my first test of my updates. NUVA had huge news come out and shot up about 40% within about 10 minutes. I received a short signal at 41.87 (HOD was 42.50) so that is about as much as I could ask for. I did sissy out though with my shorts. My first offer was at 42.08 and my next was at 42.61. Granted my signal calls for a closer spread in normal situations but these happen so rarely and with MIL very fresh in my mind I thought I may be looking at a 50% or higher gain peak before topping out and didn’t want to take on the risk to quickly. I did however widened out my gain target and more than made up for lack of shares based on a normal target. I took a gain of 2.22 which is one of my best and the whole thing lasted 2 and a half minutes from enter to exit. I was also pleased in how calm the whole process was for such a quick on the fly trade.
NUVA + 222
DLTR was a challenging stock the last few days. about a month ago I lowered the impact a gap has on the signal generator and as a result I ended up in DLTR at the high point of the move it made (had it gone one penny less the next bar would not have been qualified and I would not have entered for another 90 cents or so). This one thing changed it from being a very good trade into a loser but I am glad that I stuck to the plan and traded it correctly. I can’t get rid of losers but I can control how I handle the trades. I traded it back and forth today and then exited with a gain for the day but a loss for the overall trade. The only thing I could have really done much different is to have not lowered my risk by not taking stop losses but I am comfortable knowing this one was not going to blow up in face. + 23

INT gap up + 24

MHK was both a gap up and B8 + 128

+ 398
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Quote from Robert Weinstein:

Traded well today and this week and I am pretty happy about that

I received a short signal at 41.87 (HOD was 42.50) so that is about as much as I could ask for.
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Thats where I covered my longo 41.85 but should've traded it better didnt take it on ride down to 37ish believe. Much respect -takes brass balls step in front of that freight train lol.
 
Quote from Brianharvey:

Do you use indicators or price action to get you in a trend trade? Do you do like i mentioned above, and buy the pull back in an uptrend, or do you not play the breakout? (or something else)
cheers
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Sent you a PM so as not to drip too much oil on Robert's journal :D
 
Hi Xspurt,

right you are. We all are playing a "risky game" and I agree I am too.
"Good chance for a gap up and run continuation." well I guess I can't argue with that either.

I develop my signals based on the statistical odds from back testing. Either they meet the criteria or they don't. The crazy thing about that gap up B8 is that I lowered the requirements in the factoring the gap up due to my belief that I have done too much curve fitting to the point of losing out on a lot of good and statistically sound trades. There are a lot of variables and that is one of many and this one actually made it to the penny. One penny less and I would have entered in over a dollar higher later in the day and it would have been a gain. The most important point is that it was a signal, I took it and I stuck to my rules. Even so as a fade it was not that bad especially considering I took stop losses for risk management that ended up changing it from a gain to a loss as well.

Best to you

Robert


Quote from Xspurt:

Goodness you sure play a risky game! Daily, weekly, monthly momentum up, daily gap up to new highs on massive volume, 15 min triple base on 55.40, trendline support on 15 min still holds, 30 min selling overwhelmed with buyers.

On the positives for a short: the 15 min vol last bar but against that is everything bigger and serious support on 55.40.

Good chance for a gap up and run continuation.

Risky hero trading shorting run away strength. The gap up with such long term momentum gave a 2 min buy that was low risk for massive returns. Hero's fight trends. Sorry but doesn't bode well for 2010.
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Hi GG,

If there is one thing I know is that my ability to read a chart is poor at best. This is why I am only now taking trades based on signals and never trying to "figure it out" by looking at a chart.

So thank you for posting the charts but to even try to gather an opinion is counter to what I been working to do. I am happy to say that this week was about trading my plan and next week I expect to even do better.

thanks GG and have a good weekend

Robert





Quote from GG1972:

I am just posting this chart so you can draw your own conclusions _i traded EL but not the other two.
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Hi CGR,

Thanks and as it turns out you are correct about DLTR

Not much else to say besides it had a bad result

Best

Robert

Quote from cgr1971:

Hi Robert, I have been following your journal lurking without posting for a while. I just can't help but say something at this point, it is painful watching you throw your money away. Xspurt is right, I pulled up the charts for DLTR and looked for myself, there is nothing anywhere that says short on 2/24. When I first started trading I blew out my account doing exactly what you are doing, SHORTING IN TO MOMENTUM! Quit trying to swim upstream and go with the trend. Yesterday you were looking short as DLTR was bouncing off of the 20SMA on the 5min chart, Red on the chart. Today there was a buy as it was bouncing off of the 15min 20SMA. I projected the 15min 20SMA on to the 5min chart, the blue line. I would have been looking to buy on a stop around 55.75 after the close of the 10:15 bar. It was also a buy on the 10 minute chart above the close of the 10:10 bar. Look on the one minute chart, price took off at the open of the 10:16 bar, at the start of the new bar on the 15minute chart. The trend is your friend is a very true statement.
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Hi Deadwood,

Good advice. I have two news feeds. I actually normally don't get a lot of value out of them. I think from my understanding is that you need to have bloomberg for news and stare at it all day long waiting with your finger on the button or your gonna be late.

What news service do you use?

Robert




Quote from Deadwood:

Robert, if you really want to be a trader then you need to take it seriously and start treat it as a business instead of a video game. Investing in a news feed would cost you maybe $500/yr and save you probably 50K given your history of getting in the way of frieght trains without even realizing it.

Btw, I posted some rules for you a few months ago. You consistently break each one. You should go back and read them.
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Hi 21,

DLTR was a bitch but actually it was a signal and they don't all work out so "oh well" it was a small loss and I am willing to take small losses when the payouts are almost as good and the hit rate is off the charts.

I also agree that when it looks the most scary and everything inside you says do not short is when it is getting very good to short

Best to you

Robert


Quote from trader#21:

DLTR is a highly speculative stock. With a bit of good trade management shorting can definitely be a great success. When such stocks reverse, they freakin butcher the buyers. Also it is good to short only when it looks the strongest.

EDIT: was shorting DECK today and made some money... same category.
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Quote from GG1972:

Crucial day in markets today if SPY close below 110.75 will take a swing at short EoD for next week
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While driving today I heard on CNBC that the VIX is pretty low.

I would like to see the market move higher for a while.

Robert
 
Hi Nod,

Strange that they halt on the second release. I am guessing the first reaction was much greater than they thought. I think halting stocks is a total waste of time and money. Other than protecting the insiders who are pulling the strings I don't think it would be done. Perhaps it makes some feel better. anyways its just dumb

remember last year when i had two or three get halted on me in 08 or 09 in one month? that was crazy.

Best

Robert


Quote from NoDoji:

Interesting Jess said he had no fear of NUVA halting while in the trade because of the news alraedy on the table. They just halted.
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