Weinstein Trading and Fading

10-22-13

I think it's fair to say that I ripped it up today. Last night I decided to reassign the tickers to the scanning computers. I currently have in operation three Tradestation radar screens populated with most of the top 2600 stocks by volume. I also have a "mop up" scanner powered by StockFinder for the next 1K tickers.

Updating the tickers proved to be highly profitable because my best trade today was a thinly traded (BREW) that I was able to put some size on.it although I would have put even more on if I knew what the catalyst of the move was. (BREW) had the pattern of a stock that was about to get a takeover offer and it was leaking.

As a result, I didn't get medieval on it, although I wanted to, but I did have more than a full allotment.

(JCP), my swing fling drove into the green today and i closed a few shares and wrote more calls with a Nov 1st expiration at a strike of $7. I'm really liking the covered call (JCP) trade at this level. It's far from a risk-free trade, but it does have potential to realize an outsized return.

I try to keep in mind what it was like owning (GE) for about $10 and (LVS) for about $7.50 when I think about this one. I owned (C) for under $3 and on an adjusted basis it's now $5. Of the four, I can't say (JCP) is the most appealing, but I can certainly see it trading above $14 within a couple of years. In the mean time I will collect a lot of option premium, or not.

(BREW) + .44 on enough shares that this one trade increased my account equity 2%

(CSUN) + .23

(GNTX) +.50

(JCP) +.08

(LXK) +.43
 
Quote from mu2pilot:

Robert-

I'm a longtime lurker and have thoroughly enjoyed your journal. Thank you for putting yourself out there so that other aspiring traders can learn and better understand the tasks before us. A great read!

Can you tell me what software you use to screen for trading opportunities? Can you go into any detail as to what you're looking for?
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Thanks!

I use Tradestation and StockFinder for scanning. Both have their pros and cons, but Stockfinder doesn't appear to be a priority for the parent company so you're probably just as well off picking Tradestation if you want to avoid learning multiple systems.

I'm primarily a short seller with equities, although I will trade long if I believe panic selling is nearing a completion (JCP is a good example).

Some call my style RTM (reversion to the mean), but I consider it more of a selling to over-exuberance than a "mean". Maybe a reversion to true value would be closer.

Some advantages include positive slippage and capturing the spread with each trade (in theory I should have a slight edge on every entry) and best of all ECN rebates. With commissions as low as they are now, I can all but trade for free (for about 95% of the trades anyway)
 
10-23-13

It was a mixed day. All my trades (all two of them) were profitable, but it could have been a much better day. I was up smartly with (APOL) and at the end of the day instead of closing out the few shares I had left shorted with it, I decided to add as the price moved higher.

When a stock closes at the high of the day (or very near) that is the wrong decision. So I paid the price (again). I did manage to close out a few shares of (APOL) in afterhours and I also shorted more so my cost basis rose nicely, but the cost to borrow isn't cheap (otherwise I would be fine holding over). Anyway, the good news is that I will probably see another gain tomorrow and it will be fine.

On a more positive note, (JCP) is working really well for me. I covered the last of the shares with $7 calls today so all the shares are hedged to some degree. My cost basis is only $6.65 and I watched it close at $7.04 (traded a little lower in after hours though).

(SWY) was another trade I made today and it closed out relatively quick with a nice gain.

(SWY) + .30

(APOL) + .06
 
10-24-13

Well I was wrong about (APOL) and to top it off when I tried to exit in the morning I didn't get my fill and I dug my heels in and refused to chase it. That cost me dearly as today would have been in the green had I just closed it out yesterday. I'm still short (APOL), but not in my trading account. Now it qualifies as a short based on the gap plus one/B6 signal, so I added to the position and will likely exit either tomorrow or Monday.

I had two other losers today, the most all week. (ACAD) started out shaky because the first time I shorted it, it drove down to the profit target price before I could enter the covering order. I was smart about that though, I decided to take what I could at the time and be happy. That decision saved me from losing the gain I had and would have turned it into a bigger loser.

(NPSP) was the other loser that I just couldn't gain traction with. Basically I entered into the move too early and never had a real chance to trade through it. Not that trading around the position would have made much difference, but it would have helped. I had one chance and it during a time I was managing several trades at once and missed it. No biggie because the rules don't require trading around the position.

I traded some (APOL) puts too, and they were a small gainer, but nowhere near enough to even dent the underlying (APOL) loss.

(CLGX) kept me waiting until nearly the end of day when it finally broke and reached my full profit target. I moved some of my covering buys higher because it was getting late and I needed to exit while at the time I was sitting on three (including CLGX) losers.

(CSUN) revisiting me again today and delivered some sunshine. Not the biggest gainer, but not the smallest either.

(GNRC) was my best trade today and even beat (CLGX)

(IMAX) was fast and reached the profit target.

(IVC) was a stockfinder signal that didn't have a corosponding Tradestation signal so I exited early because I already had enough irons in the fire.

(APOL) puts + .07

(APOL) - .58 on a lot of shares

(CLGX) + .36

(CSUN) +.29

(GNRC) +.46

(IMAX) .50

(IVC) +.13

(NPSP) - .46

All in all I'm disappointed with the (APOL) trade, but otherwise it was a solid day and would have been in the green if for not (APOL).
 
Quote from NoDoji:

Bob, you brought back memories of us shorting APOL back in Jan 2009. I just looked at a chart and realized I was short about a dollar from the last high it's seen since. Why didn't you tell me hold that one for a while??? :D

http://www.elitetrader.com/vb/showthread.php?s=&postid=2253574l#post2253574
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LOL, very funny, I was thinking the same thing the whole time. I remember us shorting it very well (I don't remember most, but that one I do).

Friday was a much better day (great day actually). It's been a good month.

My goal is to get things automated. That will free up a lot of wasted time.
 
Quote from Robert Weinstein:

My goal is to get things automated. That will free up a lot of wasted time.
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My goal, too. Seeing a price action pattern in a specific price context is so easy for me, but trying to define the pattern and the context in a way that can be coded is quite a challenge!
 
Quote from NoDoji:

My goal, too. Seeing a price action pattern in a specific price context is so easy for me, but trying to define the pattern and the context in a way that can be coded is quite a challenge!
More...

I missed another great trade today because I wasn't fast enough.

Yeah, I agree it is quite a challenge, but I also found that breaking it down has led to new discoveries, so it's a mixed bag IMHO.

How's your hubby's trading box developing (if at all)? The last I recall reading an update was like four or more years ago.

If anyone knows how to API through the DAS platform, I could use some hand holding
 
10-25-13

After a tough Wednesday after hours and challenging Thursday, I got back on the horse and rode it hard. Well, maybe not hard, but certainly with flair of "I don't care" as in I don't care if I get the trade or not, I'm playing my cards tight to my chest.

It's the way i designed my trading strategies and the way that I'm most comfortable with. All I need to do is repeat today everyday and life will be grand.

I closed out the (ACAD) puts I bought as a carryover. They did "ok" as i was busy attending to other options when the price dropped so quickly at the open and I missed the exit. I closed out with a gain, but not as nice as i would have liked. Anyway, I remain happy with the way I handled it.

I took some gains with (JCP) covered calls and rolled over until November. I now have the next three Fridays as expiration days for shares.

Today's big trade was (NVGN) a thin $5 stock that blasted off to peak out at over $6.60, up over 35%. I can't say these make me the most comfortable, but I faded it from just below $6 all the way up until $6.69 and even $6.84 (above the high of day - I have no idea how that happened). It wouldn't break below $6 for me though and that's where most of my covering buys lay in wait. With under 10 minutes to go, I did what I hate doing, I hit the offer (paying ECN fees in the process) and exited the majority of shares at $6.15. luckly I added to the short at a higher price before that, which helps soften the blow.

I traded (AFOP) based on the gap higher and coming within a penny of the William signal. That did ok.

Lastly, I traded (ETN), my big price stock of the day. I didn't have much size on it, but I did manage to squeeze a little extra gain out of it due to the entry price. All in all, I ended the day better than expected and ready to take on next week.

(ACAD) puts +.10

JCP calls + .23

AFOP + .30

(ETN) + .58

(NVGN) + .14
 
10-28-13

It was a pretty slow day, especially for a Monday during earnings season, but I managed to squeeze a few dollars out.

I'm not overly proud of my Apple trade even though it made money. It was an after-hours trade based on earnings price action and overall I haven't been able to make much of an edge trading it. As it turns out I was able to read the market for (AAPL) well, but only after I was already in and the trades simply clouded up the judgment. In short, I make a better coach than player for many discretionary type of trades.

mechanical trading = an edge and profits, discretionary is way too volatile, with feast or famine. The choice is pretty simple really, stick to mechanical and let the profits flow in nice and steady, without all the extra drama.

I had some Tradestation issues and needed to reboot the system. That took about 15 minutes or more so I may have missed some trades in the process. I'm not sure and I don't really see a need to find out. Not when I have plenty of other things on the high priority list.

Perhaps because of the delays or just the overall market conditions I didn't make a trade until over 30 minutes of trading was finished. Not related, but I missed another trade today due to not being able to load the information into the platform in time. I am working to automated the process, but that's not moving along smoothly. I'm alos not interested in giving up the next three months of my life to get there. So I may look for another broker for some of the trading that won't require me to learn a whole new skill set.

I traded (FIO) well and had some size on it, especially for such a small ticker. (AMAG) wasn't big but I hit it near the top of the move.

(AAPL) + 2.25

(FIO) +.34

(AMAG) + .50
 
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