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Friday, October 22, 2010

FRI. OCT. 22- Learning From History

A few weeks ago, I noted that I had analyzed many trades in order to truly gather data for attempting to aid my own trading performance particularly in light of the switchover of EDGX to the Direct Edge Stock Exchange. A few people asked me about it so I want to go into one of my (many) weird quirks so I can explain myself better. I had a phenomenal trading year in 2001. The volatility of that time served me quite well thankfully. In 2002, as the markets settled in, my year trended lower as compared to 2001…I was profitable every single month of the year but to say that my January/February was better than my November/December is an understatement. As 2003 started, I got off to a decent if unspectacular start. Around the 3rd weekend in January, I decided to go back and analyze the first two weeks of my trades in 2003 to see if I could find something to improve myself. I figured some things out…but the best thing that came out of that experience is that each and every trading day, I keep track of the stocks I trade, the amount of shares I trade in each, the total revenues, the total costs, and the net profit of each symbol. Every week, I go over the previous week’s trades. Once a month, I analyze the previous month’s trades. Once a year, I analyze the previous year’s trades. Furthermore, when there is a time that I don’t trade as well as I feel I could, I go back to this gigantic spreadsheet of my trading career. Not only is it from this spreadsheet that I have been able to find the tenets for what generally works and what doesn’t (for me), it keeps me from losing vast amounts of money because I am forced everyday if nothing else to re-live the previous day or two and subconsciously much less consciously study my trading as I enter my data. It is this spreadsheet more than any one factor (and accompanying notes when I am going really well or really poorly when I denote my best and worst trades- some of which have formed the basis of blog entries in this space) which provide a harvest of information for me to better myself as a trader.

Markets throughout the world were mixed overnight. In Asia, Tokyo was up 0.5% with Hong Kong down 0.6%. In Europe, Frankfurt is up 0.1% while London is down 0.4%. Gold is down slightly with oil up ½%. Bonds are a tinge higher with the dollar a tinge lower. Futures are slightly ahead. There’s no economic data out. All of this is Erik code for “it’s relatively quiet right now.” For the day, the story remains the dollar but with movement muted ahead of this weekend’s G-20, equity movement will likely be choppy but in a less volatile range than yesterday. Focus on the earnings, the techs, the rare earth plays once again, and random microcaps that have random moves (such as LIVE and CDTID yesterday).

Reiterating-

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

BIDU- decent earnings

SNDK- great earnings

RVBD- great earnings

NCR- decent earnings

CMG- great earnings

FTNT- decent earnings

NFLX- closed near a high after posting great earnings

GRA- closed near a high after posting decent earnings

CYD- closed near a high

SURG- closed near a high

TZOO- closed near a high after posting decent earnings

LYTS- closed near a high after posting decent earnings

VRA- closed near a high

CODE- closed near a high

CY- mentioned on “Mad Money” last night

KEY- decent earnings

Bad-The following stocks have bad news and/or a weak technical pattern

AMZN- poor earnings

CTXS- poor earnings

BUCY- terrible earnings

QLGC- poor earnings

CYT- terrible earnings

INFA- poor earnings

ALGN- poor earnings

CRUS- closed near a low after reporting awful earnings and mentioned negatively on “Mad Money” last night

JCG- closed near a low

BORN- closed near a low

REE- closed near a low

ARO- closed near a low

HOC- closed near a low

LHO- closed near a low after posting earnings

LTM- closed near a low after posting earnings

FNF- closed near a low after posting earnings

GRNB- closed near a low after posting earnings



Earnings:

FRI OCT 22 BEFORE

BPOP DOV EXC

HON IR KEY

PAG SLB TROW

VZ


Epiphany Trading, LLC
www.epiphanytrading.com

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President

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