Monday, April 30, 2012

Trading video I found with Jack Schwager

Over the weekend I stumbled across this video on YouTube of Jack Schwager.  If the name rings a bell somewhere then you have more than likely read one of his books.  I picked up one of his, “The New Market Wizards” some time back and have read it off and on ever since.  In it he interviews some of the top traders that he could find at the time and told their story.  The video is good, I like it.  It covers ideas and skills that can help make you a better trader.  He uses examples from the traders he has interviewed to highlight the points.  The main thing that I took away from the video is simply, to be really good you have to trade your way.  Your trading style must fit you and your personality.  It has taken me some time and some money but I am finally starting to find my way.  Take a look and let me know what you think.
That’s it for today.  Here’s to finding your own way in trading and keeping an eye on your Everyday Money.

Friday, April 27, 2012

Watching Amazon run ahead

Let me start by saying that Amazon (AMZN) doesn’t fit my parameters so I don’t trade it. For the most part I don’t really keep track of it either, except on those days that it runs up like crazy and it is all over the headlines. It doesn’t pay a dividend and that is one of my rules. No dividend, no trade. That being said it is still hard to watch a stock run 15% plus today and not be a part of it. Amazon reported good numbers yesterday and was up big in after hours and up today on big volume. I had thought about taking a flyer on it yesterday before the close. I have a kindle touch and buy stuff from Amazon. And I had a “feeling” that it would do well yesterday with its numbers. If you don’t recall I am trying to get away, far away, from trading on feelings.

So, on the whole I am glad I didn’t chase those feelings yesterday with a buy of Amazon. As I watch it bounce up today I have been trying to remember that it is all about developing solid trading tactics, the kind that make me money year in and year out. Flyers won’t pay the bills consistently. It will be those skills that allow me to transition to full time trading. At least this is how I am rationalizing missing a 15% move in one day.

If you bought Amazon yesterday and caught that big wave today, congrats! Have you jumped out after the 15% + burst or are you holding out for more?

Here’s to trading guidelines, sticking to them, and keeping an eye on your Everyday Money.

Thursday, April 26, 2012

The stupidity of adding to a losing stock position (XCO)

They say confession is good for the soul.  Well this one has been months in the making and perhaps overdue.
So the books I have been reading, for the past oh say… forever, say that adding to a losing stock position is a sucker’s bet.  It is the amateurs that try and average down into profits instead of cutting bait and moving on.  It sound easy enough but there are times I still have no mental discipline.  Such was the case with XCO.  On January 10th  2012 I bought a little Exco Resources Inc. (XCO) for $9.30.  (There has to be a bottom somewhere for natural gas prices, right?)  It kept dropping throughout the day.  The next day I threw more money at it, buying again, this time at $8.80.  The games our mind plays when trying to trade stocks.  And I thought my mind played games when I was giving up smoking.  The short of it is that once again I was trying to catch a falling knife without the mental discipline to do it half way safely.

Nat gas prices can’t possibly keep falling

Famous last words as the past months have seen the price plunge, to what I think, is an all-time low.  Natural gas quotes are now routinely near $2.00 .  Sub two dollar trades have printed enough that it seems almost common place and people are no longer shocked.  As far as XCO, it would have to work really hard just to be able to see it’s way out.  A short while ago it was trading under $6.   This position is so far underwater of my $9.00 breakeven, that it might as well be my own personal submarine.  It has recovered a bit in the last two days, just enough to give me the tiniest of slivers of hope that one day, some day it will come back to the surface.  Then again maybe it won’t.  I once thought that about Orion Pictures (look it up).

Long term take away
My goal is to one day have a pile in the trading account big enough to allow me to dump the day job and trade for a living.  In order to do that this kind of mental lapse has to be learned from.  Don’t add to losers… ever!!  Even if this stock somehow gets back to good I may keep it as a reminder of what not to do.  Well that’s it for today. 

Here’s to learning from our mistakes and keeping an eye on your Everyday Money.

Wednesday, April 04, 2012

Games my mind plays when trying to trade stocks

For the last couple of days things have not been great on Wall Street. Good!! I was looking for some stocks to pull back so I can get back in. Yet none of the ones that I track have pulled back to the point that I am compelled to jump back in. As I watched the prices bounce up and down today my mind started to play its games.

Should I change my buy price?

Maybe I should be tracking different stocks.

What happens is this is as low as it goes and then reverses and I miss out… again?

Maybe this is just the beginning of a bigger pull back and my buy prices are way too high.

I am going to feel like an idiot if this keeps falling for the next couple of days and I jump in too soon.

And the games and thoughts swirled through my head all day. And to think this is what I want to do full time in the future. Quite the day job and just trade. It seems like the perfect idea until my mind starts spinning on days like these.
Make the right decisions and it rains money. Make the wrong decisions and you get pounded. Simplicity defined.

Here’s to making good decisions and keeping an eye on your Everyday Money.