Whenever a professional athlete tries to make something happen, usually what happens is that the athlete strikes out, misses the shot, or has a throw intercepted because he is taking a chance that he ordinarily would not take. It is the same thing with trading. All of us (me particularly) hate to lose. I for win don’t like to win; I expect to win. I don’t have a chip on my shoulder whatsoever. I know that I could be a lot better trader (much less person) else if I was making tens of thousands of dollars daily, I wouldn’t be doing this too much longer as I’d earn my fortune and retire! That said, I fully expect to come into work and walk out a little richer than when I walked in. If I didn’t have that attitude and confidence, what’d the point be of me trading in the first place? I know if I am prepared and do the right thing, good things will happen. And this leads to my point as I circle back to the first sentence in this piece. As a very bright trader noted to me yesterday, “you lose your concentration to make a good trade after several bad 'cause you can not think straight.” So, what happens oftentimes is that one gets ahead a tremendous amount of money early (or is around even or worse if one was not prepared early in the day when the best money is typically earned between 7AM and 10AM). Then around noon, one does a tiny little trade and loses, say, $100 of his $2,000 gain. The natural inclination for most people is to have the “I have to get this back’ attitude. So, one tends to forget what made him/her successful and begins trying to chip a bit by doing tiny scalps. What ends up happening is that one tends to keep losing small and suddenly $500 of that $2,000 is gone. Then one plays a bit bigger and wouldn’t you know, $1,000 of the money is gone. And we are all guilty of this. The secret is quite simple. After that first tiny $100 loss, remember what got you ahead $2,000 in the first place. What it usually tends to be is that one went from letting the action come to trying to force the action. Rather than waiting for a good pitch, one swings at the first thing one sees using the baseball player analogy. Traders simply cannot do that. So no matter what kind of day you are having (particularly if it’s a good one), do not get away from it is working. Notably, if you find yourself doing random trades in the late morning, just ask yourself after the first loss or two what it is you are doing. Take a quick walk, come back, and watch things for a bit but do not make a trade until you get yourself straight mentally. Then, when the next good trades come to you rather than doing the “I know this is in the middle of the range, but I think I can squeeze eight cents out of it” thing, you’ll be ready and willing to do the good trade rather than poorer, madder, and frustrated from doing a series of small bad ones.
Markets in Asia were down overnight with prices off ½% in Hong Kong as Tokyo was closed for a 3rd straight day. In Europe, the bourses are up about ¼% average. Bonds are down a bit and the commodities markets are down slightly. Equity futures continue their relentless climb higher in the bull market of 2009. For today, it’ll be quiet anew ahead of the Federal Reserve meeting in a listless session with action focused on microcaps. The Fed meeting should be completely uneventful barring a change in wording in the Fed statement at 2:15PM. So, do your trading early and watch for potential movement after the Fed meeting else trade/tread carefully.
Watch list:
09232009Eriklist.zip
Reiterating-
Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
RINO- guest on CNBC from Belmont Partners highlighted the stock late yesterday afternoon
BEE- closed near a high
GKK- closed near a high
STX- decent earnings outlook
JPM, GS- among the best performers in a strong financial sector
T- on “Mad Money” last night
CALI- closed near a high
MXWL- closed near a high
SOL- making an acquisition, raising revenue guidance, but also doing share offering
GIS- terrific earnings
XLNX- raised revenue guidance
OPXA- triggered milestone payment from Novartis
KERX- positive Zerenex study
ASTI- signed multi-year supply agreement with Turtle Energy
GENZ- lowered revenue guidance on two products, but did so due to supply shortage and noted it’d be able to ramp up production by 1Q 2010
Bad-The following stocks have bad news and/or a weak technical pattern
AIG- closed near a low after rumors of a secondary offering surfaced
ATPG- share offering and discussed oil production outlook
GDP- share offering
INCY- share offering
LCC- share offering of 26.3 million shares a t4.81
DAC- in an operations update, company indicated revenues were going to be substantially less than expected
PALM- 20 million share offering at 16.25
ABX- 109 million share offering at 36.95
AZO- poor earnings
Earnings:
WED SEP 23 BEFORE
AZO GIS
WED SEP 23 AFTER
BBBY CMTL CPRT
CTAS PAYX RHT
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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