12.23.2016

2016: a year in review

It is almost the end to this earth year. 2016 has been very fruitful. I think it's appropriate to give time for some quiet reflection.

It was Year 1 of being equipped with the ZF system. My immersion is still ongoing. And I do believe it is something that will not end soon. I still learn something new in every trade that I make. Ms Market is a hard mistress, she takes away as much as she gives. And it seems that I entered in a long term relationship with Ms Market, for better or worse. 


With the recent launch of the ZF ORACLE, it has provided me with the perfect time to go back to my trades this year. 

Analyzing my trades, I still have a natural inclination to buy breakouts. It really is my bread and butter setup. Aside from breakouts though, there was a small collection of bounce trades here and there scattered once in a while. Then there are the TF trades. I still have to tighten my stops for those. There are still a lot of profit leaks in my trades and I plan to plug them eventually.

Going over my trades, I found out that my hit rate for the year is still pretty low, about 43%, so there is a still a lot of room for improvement.

I was pleasantly surprised to find out that there were only a handful of stocks that gave me most of my gains. 






Those are some of the trades where in I was able to gain multiple times in a single stock. I think I missed a couple of others but I think I was able to milk these stocks for all they're worth. 

So after looking back on the past year, it's now time for some resolutions or goals for the new year. 

One resolution for the new year is to really ramp up my documentation skills. There were a lot of trades that weren't documented properly, real and paper trades. So much potential learning lost. I hope that Excalibur, a tribe project, can help solve that particular weakness of mine. 

Another resolution is to trade less. Focusing on those perfect setups. I have already started on this and have observed that this trait has been lessened this last quarter of 2016 but in the first two quarters, I had to return some gains/profit due to overtrading. 

One more goal is to get some more badges. Seeing one of these bad boys in the palm of my hand has really stoked the competitive flames in me. 

And lastly, will definitely step up my RAK game and have already discussed this with the Mrs Robot. We are now setting goals for this and identifying the potential beneficiaries for each quarter of 2017. That should be something to watch out for. 

Ok, that's enough reflection for this robot. Here is some ear candy for you guys. Happy holidays and let's get ready for 2017!




12.01.2016

Trend Following: LIHC

Trend following. You hear or read it often but ever wonder how it is done? 


Let me try to give a short walk-through on how my neural networks implement a trend following trade. I will be using my latest trade, LIHC as an example. 

The first thing to remember in doing a trend following trade is to watch your entry point or your average price (AEP). The ideal entry is to get in before or right at the start of the trend. How to do that? Read up on the boss's blog about ZS and AOTS. For LIHC, this was easy to spot since it also coincided with a multi year breakout. 

Next comes the hard part. The holding time. 

To get a better idea, watch this. These are the survivor endurance challenges. Where you have to outlast your competition for the chance of a bigger prize. 

For this example, the contestants have to hold their arms up or else they will get splashed with paint. The host can tempt them with some small reward in exchange for stopping out. Or if they get tired, they can just put down their arm. 




To put this in perspective, the rewards or the exhaustion of a person could be compared to someone selling at a certain target price or resistance. 


Or maybe if the chart or price action looks weak. There is nothing wrong with selling at those points. As long as you follow your plan then go ahead. 

For me, I do not set target prices. I'd rather set trail stops. If the price goes down a certain point then that is when I sell. That point could be a previous resistance turned support, the previous close, a MA getting broken. It doesn't matter that I wasn't able to sell at the top. The important thing is I was able to ride the bigger move. 

Another thing to consider when doing trend following trade is fighting the urge to move to the flavor of the day or the week. Like the bear in the GIF below, it's human nature to want to sell and then move to the faster moving stock. For this LIHC trade, there were several missed trades, CPG, BLOOM, FNI, STI, PPC, WEB to list a few. 



But in reviewing my past trades, it was my inactivity that has given me bigger gains. Focusing on just a few trades a month has helped me to reach my quota or targets. My system is not really built for tsupita trades. That mindset or strategy has yielded a bad win/loss ratio over time. The losses negate the wins or just at breakeven. Plus the added mental stress of having to look for good trade setups everyday. 

In reality, I am lazy. I'd rather make just a couple of trades a month then to trade multiple times a day/week. This fits more to my trader profile right now as well since I cannot be in front of the computer the whole day anymore. 

screenshot date was close of 11/25/2016

Not bad for a one month hold don't you think? One trade for the whole of November. Do take note, actual selling was below 1.5 today 12/2/2016. Wasn't paying too much attention to the movement since I was busy doing other things. 

11.21.2016

Anatomy of a port snapshot

We've always said that the stock market is a game or contest between yourself and hundreds of thousands and even millions of traders out there. In this dog eat dog world, you will need every advantage to get ahead. And you will need all these little things since they will add up. 

One of the best ways to improve your trades is to document them. This is one of the secrets that differentiate an average trader from a good or even great one. 




Taking port snapshots is one way for us to be able to grade ourselves in this game. Think of it as our report card to check our progress in our trading journey. Like an iceberg, the port snapshot is just the culmination or the result of our hard work. 

What you don't see is the work and difficult times that we had to endure to get to the level of achieving those port snapshots. 



The port snapshot can tell if we did enough preparation and legwork in doing our trade plans and if we were able to execute properly on these said plans. It can tell a lot of things if you only know how to look hard enough. 


Let's take a look at the most common components of a port snapshot:

STOCK NAME/CODE - This shows that out of the 200+ stocks out there in the PSE, a trader is able to identify which one would make a possible move. A port doesn't need to have too many stocks in it to earn. Contrary to popular belief, too much diversification is not good for your investing/trading. 

PORTFOLIO % - Sometimes a 100% allocation does not mean that the trader went 'all in' with no money left to spare. Maybe the trader just saw that this was the only stock or setup worth trading and only used a portion of their port allocation there. 

Nevertheless, the higher the allocation, the higher the conviction of the trader in that stock. 

AVERAGE PRICEThe entry price of the trader to the trade. If all buying was done in one tranch then this should be on an ideal breakout point and easy to trace. If buying was done in tranches, the aep should only be slightly higher than the ideal breakout point.

Having a great AEP shows the precision of the trader's entry. It can also usually show the trade profile of the trader. A bounce player or tsupitero or a position trader. 

CURRENT/MARKET PRICE - The exit price of the trader to the trade. The trader could have set GTCs and sold at this particular price. 

PERCENT GAIN/LOSS - Similar to the current/market price this can be treated as the final grade of the trader for a particular trade. Again, they could have sold here using GTC or sagasa sell. 

BLACKED OUT PORTIONS - This is usually for security reasons to protect the trader. But some traders out there would rather not have any blacked out portions and are secure enough with themselves that they feel it's not necessary. Kudos to them. 

See the many possible stories in one port snapshot? Learn to read between the lines and maybe it can help you to improve in your own trades. 

This is the beauty of people posting port snapshots, it can serve multiple purposes. One is to prove that it is possible to make it in the market. Another is to show that we walk the talk and don't just post analysis on a variety of stocks. First and foremost, we at the tribe are traders. We do this for a living and to earn. We want to prove to others that it is possible to trade full-time. That it is possible to survive without relying on tips and analysis of others. 

Keep this in mind next time you see someone post a port snapshot out there in the world wide web. Don't just admire or be jealous of the gains. Stop and try to dissect it. That might help tremendously in your own trading. 

It is possible to live the dream. You just need to work for it. 

So to all my fellow traders out there, cheers!



10.12.2016

Knowledge is power

Back in my formative years, saturday mornings were a time for cartoons. One of these cartoons were a group of soldiers who go out and try to stop an evil organization called "COBRA". After the cartoons they would always show an infomercial type short wherein they say this line: "knowing is half the battle"


The power in that short phrase has stuck in my neural cortex ever since. It has always manifested in one way or another as I went along in life. Knowledge is an incredibly powerful tool for anyone. It can get us out of more tight spots, hard places and other sticky situations that anything. It will also make us to be more independent since we won't need to rely on others to get by. 

The phrase can also be applied to the stock market. This was the reason why I sought to learn how to trade. I look back at my past and the constant reliance on the tips or analysis of others and remember how it was a big drain on my confidence and self esteem. I was always on edge since I didn't know when the tips or analysis would dry up or end. 

Choose your weapon
Back then I would think, if they could do it, why can't I? We are all looking at the same charts right? What secret have they uncovered that allows them to have more winners than losers? These questions pushed me to look for a better way, to acquire knowledge. I went to so many different seminars by gurus and other stock personalities yet there was always something lacking. There was always the impression that the things that they were teaching were only touching the surface of things. That it was all superficial. I know since after the seminars I would still be unable to read charts on my own after the said seminars. 

This all changed after I entered the zf course. The knowledge transfer that occurred there was incredible, mind blowing to say the least. The course dealt not only on how to look at charts but the whole package. How to deal with emotions, trading mindset, expectation setting. Being more disciplined and systematic. Such a stark contrast to everything that I went to before. 

Now, trading is a little bit easier. I've figured out that there is no secret or holy grail. It's all in the preparation. Knowing when to trade and when not to trade. Knowing when to buy and when to sell. Paying attention to the details so to speak.

It's awesome to know the power of charting. 

When used properly. 

For like any tool out there, when it is used improperly, it could mean disaster. 

See below :P


8.24.2016

Running your own race


This quote has been something that our mentors has instilled within all of us during the course. I have always taken it to mean that our biggest obstacle to success is ourselves. 

In my previous posts, I have repeatedly said that you have to fit your trades to your profile. Make it fit to your lifestyle. To who you are. 

Well, recent events have made this very applicable and real to me. The little robot has started going to school and unfortunately the school schedule has absolutely wrecked havoc on my trading style. Since the class starts just before the time when humans need sustenance and ends sometime in the early afternoon and with the daily traffic, I have had to adjust, adapt, and innovate as a fellow tribe member has stated. 

At first, I thought it would be an easy transition. This past two months it really hit me that I can no longer buy at the close. Or even see what happens during closing. Checking the charts after trading is now a regular session of disbelief at seeing breakouts missed. Intraday buying opportunities that happen right before leaving for school have to be skipped. My system didn't want to have any lingering thoughts of buying super volatile stocks while driving on the road. 

So to compensate, I have had no choice but to change strategies. I went back to my notes and reviewed about trend following and sleeper plays. Being a mentor to bastards and the seed has also been a big help since it allowed me to get a fresh perspective on the power of MAs. Having had a coffee session with Zodiac's resident Dog was also very timely for it showed social proof that a different technique can still give massive gains. The only difference was time.

Time because...

- instead of being able to buy on the actual breakout, you buy in anticipation of the breakout. Your patience will be tested.


- your entries and exits are different from being an intraday trader. It means looking at the bigger picture. 

- instead of just focusing on the daily charts, the weekly chart now gets equal significance as well. 

- I would be at the mercy of forces that are not in my control.

This has been my first attempt at a TF trade. Not perfectly executed, but I think that it will do. 

MCP


But do take note, that I still try to keep up with a checklist of the intraday breakouts that did happen successfully. Which ones that were still caught by my scanners and which ones were missed completely. For at my core, I am still an intraday trader at heart. That is something that cannot be taken away. This is just a temporary setback. 

Going back to the previous analogy, this is a race that I intend to win. I imagine that we are all in a marathon, it doesn't matter how we reached the finish line, the important thing is we reach it. My circumstances might take me a bit slower than the others for now, but I will persevere.



For what does not kill us, only makes us stronger right? And being able to add and master a whole new weapon to my arsenal will only make my final form that much more deadlier. 

8.02.2016

HOPE as a strategy


Such a simple word. But it can trigger such a mess of human emotions. 

A fresh start. 

A better outlook. 

A new beginning. 

chance for a new day. 

Sounds so nice and dandy. All sunshine and rainbows. Well, sorry to burst your bubble, but it's not all that. 


HOPE 

It can also sometimes bring the worst out of humans.


Just remember, HOPE should never be applicable to the stock market. For this is not the place for your emotions. You have to be very objective in your buying and selling. Stick to your plan and execute. Hope should never be a strategy. For here, only the charts are your friend. 




6.29.2016

New programming upload: One Day Reversals


It's been a while since my system has had new programming uploads. This one has been a long time coming to say the least. My trading profile has always been about breakouts and uptrends. For me, it's always so much easier to trade from strength to strength. 

But to focus on just your strengths is a mistake since you will leave a resource left untapped. And there is so much potential in bounce plays. This has been one of my goals this year. To try and assimilate bounce plays into my system. 

To do this, I went back to the charts. Reviewing past discussions and lessons. Analyzing where I went wrong and what held me back from execution. 



So I started with just paper trades here and there. A lot of mistakes were made and adjustments were in order. Some extra calibration was needed. Some more reps were needed. 

Finally, this past month I think I have successfully integrated and passed the one day reversal technique. Here are some of my results.

DD trade. Textbook one day reversal. 



APX trade. This one I was not able to maximize due to scheduling difficulties. But for me, the important piece was the execution. Never mind the lost profit because of the way it behaved after. 

That's one kind of bounce play that I can safely say is already in my arsenal. Here's to adding some more bounce weapons in the future.

6.20.2016

Finding yourself


There is a thing called the rorschach or inkblot test. Humans are asked what they see in an abstract image. There are no right or wrong answers because it is actually a trick. Their answers reveal more about them then what is in the actual inkblot. 

Viewing charts could be the same way. Different people looking at the same chart would give different views. For example:


"looks expensive"
"BREAKOUT! ALL IN!"
"take profits"
"too bad. sold early"
"I'm not convinced, will wait another day"
"Can I still enter? Is it still safe to buy?"

Another example is this:


"avoid!"
"time to bodega"
"nowhere to go but up"
"I'm an investor and am waiting for future profits"

Two very simple charts. But it can give a wide variety of responses. And this is just a chart with MAs. What if you add in the different indicators? RSI, MACD, STOCHS, STS, FastK, etc. 


Mayhem. 

Analysis Paralysis.

This is why having a simple trading system can be beneficial. Less is more. Having set rules on buying/selling, strategies for the multiple trade scenarios. Having a trading plan is the key to success. 

Going back to the inkblot test and the charts, being able to identify your trading personality will help you to pinpoint make the necessary changes or upgrades to fix any deficiencies or weaknesses in your trading profile. Maybe you don't need an overhaul, just a few tweaking. 

But hey, this is all just the ramblings of a robot. 

5.30.2016

BADGES: ALT

Second badge of the year! Thank you ALT! The mrs robot was extremely happy to know that there will be a different kind of online shopping to be done. She said IT'S. ABOUT. TIME. And expects more baggers to come. As in every month. Talk about a demanding boss. 



Well, I wasn't really able to sell at the exact point of 100+% up because of the sudden selldown, but I was still able to sell at the highs. 


Plus, I was able to make another trade in the same stock that pushed my profits for ALT to reach the bagger status. It should have been bigger if only COL was working properly. My initial buying was set at 10.9 then moved to 11.8. But COL had massive slowdown and my buying was only hit at the price seen here. What could have been another 30-60% up was downgraded to 18%. Still not bad, but that only reinforced the idea of me changing brokers for my trading port. 



Good thing I was able to sell this trade early before COL really acted up and couldn't process orders during the massive selldown. That would have negated the bag to a pencil case. 

5.15.2016

Trader Profile: Trading Systems

Let's get this out of the way. There is no perfect system. No one size fits all. It's similar to the analogy of the education system as seen in the image. For further info on that do some searching on the web about the fish climbing up the tree analogy.


In layman's terms, it just means that a breakout trader's strategies should be different from an investor or a bottom fisher's strategies. When I say strategy, I mean the buy/sell points, holding period etc. The reason for choosing a system depends on multiple factors and you have to be aware of these factors before entering a trade. Here are a couple of things to consider:

Space & Time:



This refers to how much time you can spend looking at the market. Are you a full-time trader? Can you monitor during the whole day? If you have to work a day job then it would be more dangerous for you to buy very volatile stocks. Stocks that could swing from +/- 10-15% in a day. Can you take that risk?  

Another aspect of time is how long is your holding period? If you see 3-7% gain in your stock do you sell immediately to lock in your profits? Or can you still hold it in case it goes even higher in the coming weeks/months?

Risk Profile: 


This refers to how the way your brain is hardwired. When you see a stock going down do you see it as a buying opportunity or do you avoid it? There are players who are bottom feeders and are happy with a stock going down because they think that it is just retracing and they can get it for cheap or low risk.

The other side of the coin are the momentum players who would only ride stocks that are on the way up. Buy high, sell higher is their motto. 

One more aspect of your risk profile is how much are you able to put in one stock? Do you go all in (something I covered before) or place only 25% of your port in one trade? For those just starting and still finding their system or personality as a trader, I would suggest to place 10% or less in a trade. Just to have some skin in the game. 

Find your system



Going back to the earlier analogy, there is no one size fits all system. You have to stop and reflect on who you are as a person and a trader then make your system fit you. Don't compare yourself to how big someone else's gains are. You don't know their journey and how long it took them to get there. Focus on your own journey and one day you might be the one that others are looking up to. 

Bonus note: 

Just don't try to invert your charts. That is most definitely not a system. It's just pure and utter crazy talk. If it wasn't, then you should be able to see it in all respectable charting software out there.  





4.05.2016

Beware the Siren's call

After browsing through human history, my mainframe was surprised to read about certain creatures in ancient stories.

"In Greek mythology, the Sirens were dangerous yet beautiful
creatures, who lured nearby sailors with their enchanting music and voices to shipwreck on the rocky coast of their island."



What is the significance of the sirens that my mainframe deemed it a worthy read? Well, it seems that sirens are still existing today, they just adapted to the times and come in a different albeit still deadly form. Allow me to elaborate. 

Tell me if you've heard this before, you're browsing the internet and saw something that caught your attention. Someone mentioned a stock will move in the coming days. It's your chance of a lifetime and they want you to get in on it. What luck! This guru just shared an insider secret and you're ready to go all in! Day 1 of 20. 100-500% increase here we come! 

Boom goes the dynamite!


Apologies for popping your proverbial bubble but always, always remember that there is a reason the target prices are out of this world. It's to lure the unsuspecting people and newbies out there. It's very similar to how a MLM or networking scheme works. Blind the other humans with massive potential gains yet don't telling them that there have to be casualties along the way.

Stock market trading is a zero sum game. For someone to earn, someone has to lose. The more people who will believe and sit on a stock because of the belief that it will reach a stated target price, the easier it is for the operators to get out alive. 

Sounds familiar? Isn't it just like the sirens luring sailors with their melodic voices huh? 


So watch out, that dream stock with the heavenly target price that looked so enticing might just come back to get you and drag you to the depths.

3.31.2016

Choosing the right mentor


Just like what a wise creature from a galaxy far, far away once said, there is always an apprentice and a master or mentor. That is the way things work in the universe, wherever you may come from.

In the current stock market setting, multiple mentors have come up in the hopes of guiding or showing newbies the way to profits or even just respectable trading. These mentors have come in all shapes and sizes. 

Given the variety of choices, how do you choose which mentor is the right one? Well, here is a simple analogy on how my mainframe chose to be mentored by the entity known as Zeefreaks. I'll make it easier for the basketball loving fans out there, let's say you were given a choice of being mentored by Gregg Popovich of the San Antonio Spurs or Phil Jackson of the Chicago Bulls/LA Lakers and now NY Knicks.

Here is a list of their achievements:


Gregg Poppovich

5 time NBA champion
3 time NBA coach of the year
Phil Jackson

11 time NBA champion
1 time NBA coach of the year

It looks like a tough decision huh? Like choosing apples and oranges as they say. One doesn't seem to be so different from the other. Both of them are extremely and highly qualified. Their achievements speak for themselves. So they passed the first criteria. Moving on to the next checklist.


Here is a list of their NBA tree (a list of general managers and coaches in the NBA who have trained with either one):


Gregg Poppovich

Phil Jackson


Click the images for a better view

As you can see, the NBA tree of Coach Pop is much more diverse and it's branches have reached to almost a third of the NBA teams. That is quite an achievement! As for Phil's tree, it doesn't look to have too many branches. There seems to be something that limits the passing on of his success to others. 

This trait is what my mainframe puts more weight on. A good mentor should not just be good and inspiring and all that. They should also be able to train people to replicate their success. For what is the point of following or learning from a mentor if you are left in the same state as you were in before following them. The best mentors should take you under their wing and help you to take flight by yourself. 

This is why I think the ZF system stands out from all the rest. There have only been several batches yet the number of successful students have been increasing with the passage of time. We may not have achieved ZF or Kap's level of consistency or foresight but we have all been taught to stand on our own. And I know for a fact that we will continue on our journey in the stock market. Some of us even turning into mentors for new batches as well. 

And that is the mark of an excellent mentor.




3.22.2016

Enter the Double Dragon: DD



This stock has always been on my cross-hairs ever since it's IPO, back in my pre-charting days. Only problem was my cyborg unit was never able to get any shares. Back then, because of my lack of knowledge on how to enter a winning trade, I could only watch as it moved from strength to consolidation to strength again.

Fast forward to the present, I am now better equipped with the tools and weapons to get into stocks like these. And here is a short breakdown of the trade I did.

3.2.2016

Having made a clear breakout from the all time high, I made my entry right at the breakout point.


Just adjusted my trail stops for each day and watched as the it made new highs every day. Once the stop was hit, I sold for a good profit. 



3.14.2016 (Round 2)

After consolidating at the highs for a couple days, it made another breakout and I struck again. But I was more cautious this time since my average was now higher. 

This time I didn't sell because of a trail stop but because I saw a doji candle at the top plus the fact that the psychological target of 40 seemed to be too hard to break. 


So I wasn't able to sell at the highest price but it was a good two rounds. It's still consolidating right now so who knows, maybe there could be a round 3.