Sunday, October 9, 2016

Weekly Trade Thoughts



THE WEEK AHEAD
(wow that was fun to watch..only in America do you get the Jerry Springer Show as a presidential debate, going to be a wild month!)

The Major Indexes:
ES - S&P 500 (US index of 500 large cap Stocks)
NQ - Tech heavy NASDAQ

Trend is up on all and all above their 200 day moving average (white line) and the 20 day moving average trending up. NQ holding near its highs and ES with an important week..could breakup above the yellow line or test support below. Dont fight the trend, stick with the odds look for long plays or pullbacks. Could still break new highs by year end and will play pullbacks until the trend is broken.

Current Stocks Targeting for Week Update: E: Enter and S: Stop
(the entry point is my trigger price to enter the trade)

Sold SRCL took loss of $100 or .29 R (will explain why I use R on Sunday) Sold to make room for GPRO, PETX, SEMG as they are performing stronger and can not make out account by rules
Watching:
- SXC E:7.25 - S: 6.25
Current Holds
- JD: Bought 184 shares @ 27.10 - stop 25.49
- ENDP 22.71 Bought 125 shares - Stop 19.70
- GPRO E:17.42 - S: 14.26 - 115 shares
- PETX E:9.91 - S: 8.89 - 350 shares
- SEMG E: 35.85 - S: 31.39 - 85 shares

These are my swing trading ideas (buying a stock and holding for days to weeks) and not day trading ideas (buying selling the same day)

Current : -.29 R

R: Why do I track the results using R instead of the money? Because I want to focus on the trade, not the money: Focusing on the money can make the mind do funny things. Focusing on the money can increase pressure and increase errors. When I started focusing on the R’s instead of the money, my mindset and discipline to follow my rules greatly increased. I set my goals on obtaining
R’s not cash. In theory, they are the same. A plus or minus of $1875 can be an intimating # . but a plus or minus of 5R makes it more calming.

How R works = Risk:1.5% of your account on a trade.

R is the amount of money you are willing to risk and lose on any trade.
I never risk anymore then my R or 1.5 % in a swing trade (day trading is different) Example: If your bankroll is $25,000, then never risk any more than $375 on a trade

To determine the number of shares to buy first identify the stop and entry points. Then figure out the difference between these points.

Example: If your entry on XYZ is 32.10 and your stop is 30.90, then
your difference between the entry and stop is 1.20. To determine the number of shares to buy, take your R divided by the difference between the entry and stop. R/(entry-stop)

If you are willing to risk $375 per trade, and your entry on XYZ is 32.10 and your stop is 30.90, then your difference between the entry and stop is 1.20
Formula: 375/ (32.10-30.90) ....375 / 1.20 - buy 312 Shares

This is not a recommendation to buy or sell. Follow and learn at your own risk. These are ideas I share and over the next few weeks Ill share the patterns I look for. Every Sunday I post stocks I am targeting for the week. Using a sample $25,500 starting account to make risk/reward decisions off of - will not use margin. Rules: Maximum stop loss per any trade 1.5% of account - Total Maximum risk per trade 20% of account (take your 1.5% risk / difference in Entry and Stop adjust to be shore its under 20% of account maximum) I shoot for a 3-1 risk reward on swing plays. Day trading 2-1.


* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.

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Disclaimer

I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE