Greener pastures

After a couple weeks of ecstasy in January, the PSE has been in stuck in a rut for the most part of the 1st quarter of 2019.

Since I missed most of those plays in the early part of the year, due to either my schedule, not my setup or just plain missing them altogether, my port has hardly made a dent for now. Uptrends have been scarce and sometimes it feels like it's not worth the time to check the charts. 

Personally, I do not subscribe to the idea that good traders should be able to trade in any market condition. Especially since we always tell people to be specialists. If your specialty is on uptrends and there aren't any, then why force yourself to trade downtrends? The effort or ROI just isn't worth it.

Maybe the problem isn't you. It's the MARKET. So what can uptrend or breakout traders do?

SWITCH MARKETS.

This is exactly what I have been doing the past couple of months. The US market has beckoned and who am I to say no? The tricky part has been in finding the right balance of spending too much or not enough time in charting the US stocks. Lately though, it looks like I've been able to crack that puzzle and find that happy balance. 

Trading the US market takes a pretty big leap of faith. But they have more options for people who aren't in front of the screen the whole time. A wide variety of orders not found in the PSE. To cater for every one. Currently, my system consists of waking up 30 minutes before the end of the US trading day to look for positions to trade. So essentially buying EOD. Then just a matter of setting stops during the evening of that day (market open in the US). That's it. It takes me about an hour at most from scanning to executing trades. 

Here is my port performance since the start of the year. Not bad for a couple minutes of trading a day. Let's see if I can hit all my milestones this year. 

Time to get to work. 

* I use interactive brokers. If you want a referral send me a PM.
I could make an FAQ about the US market and my broker in the future. If I don't feel lazy.

In hibernation

It's been a while since I posted anything of note. Since it was a bear market, some time in suspended animation was much appreciated. To recharge. To decompress. To reassess and realign myself with my goals and priorities.

I highly suggest it for everyone. 

Not everything is about the grind. Taking time off to invest in yourself is PRICELESS.

Now for some updates. It's been some time so here is a bunch of them:

- The Investacup has come and gone and my final rank was at 215th. Missed out on a lot of my milestones but the good thing was my knowledge and experience trading downtrends has increased exponentially. My main goal for the competition was to have a venue to trade downtrending stocks to see if that strategy is viable in the long run. In conclusion, yes, there are numerous opportunities for downtrending plays but the risk still outweighs the reward for me. Uptrends will always have a special place in the heart of this robot.

- 2018 has come and gone and it has been the most profitable of my trading career. Sure, I gave back some gains during the last quarter but that was inevitable due to the general sentiment at that time. The thing that saved me was the mindset of protecting the profits that I already gained, managing risk and allocations. That combination went a long, long way in preventing me from squandering all my gains. So again, 2018 was a BANNER year.

- Decreased social media presence. This has been by design. There has also been a proliferation of others who have taken the mantle and continued the time honored tradition of posting snapshots and provocative quotes and other wise words. But rest assured, I'm still here trading in the sidelines as seen below. 

- Lastly, I'm currently coming up with a personal project that is fun to do. Not entirely sure what the public reaction would be. Hopefully it's something that clicks with others as well. Tentative release of it should be sometime 2nd half of 2019. Here's a sneak peek.

Investa cup Week 3-5

For the past few weeks, life has caught up to me a bit. Been busy handling some stuff for business and the little robot's school. This has caused me to lose a bit of focus on the investacup. 

Then VUL happened as well. Since it was an all time high breakout (Figure 1), I made sure to have shares in my real port as well. 

Figure 1

Everything looked ready for a good, nice uptrend. Was thinking that it could follow the ATN script where it was wicky and weak before the ATH break but after the ATH breakout it would transition into a monster. 

However, Ms Market had other plans and gave a big steaming pile of crap the next day (Figure 2) 

Figure 2

Since I was too focused on my real port during this breakdown, I made sure to sell my shares there first before even remembering my VUL shares in my investacup port. Sold most of them at the lows. Awesome job to me. YEY!

A couple of other bone headed moves trading all time lows like CHP, CLC torpedoed my ranking.

Was already thinking of calling it quits sometime during week 5, but I wanted to give it another shot. I recalled the reason why I was doing the competition, which was to grade myself against other traders while trading mostly downtrending stocks. What better way to do paper trading then during a bear market right? 

So back to the grind it was. 

The thing that most people fail to realize about trading is that it gets repetitive after some time. It's all about doing the same thing, again and again and again. You can do multiple trades using the same setup. No need to overcomplicate things. 

Case in point, this setup that presented itself with X (Figure 3). It's looked almost exactly the same to the previous two CHP trades I had. 

Figure 3

The natural progression for me after collecting data on a particular setup, is to trade it with small volume. This will help to give me a feel of the trade with real money. The ultimate goal of course, is to move from small volume to real trading with conviction volume. Conviction volume doesn't necessarily mean all ins, it just means that there is enough meat to the trade that it would justify you doing all that studying and learning for it to actually make a dent in your portfolio. Otherwise, what is the point in studying that particular setup at all? 

So anyway, X was able to boost my investa ranking again (Figure 4) but I failed to take into consideration one of the new rules in the competition. 

Figure 4

And that was you are only allowed two sells to a particular stock when it is less than PHP3 in value. Long story short, my supposed intraday bounce trade for X got stuck (Figure 5). 

Figure 5

No choice but to watch it fall and hold on. Again, even more awesome job to me! DOUBLE YEY!

Ranking after week 5. 

It should have been somewhere in the 80s if the proper cut on my current X position but that's what I get for not being too focused on the rules. So I'm back to Milestone 1. Here's to another two months of the competition. 

Investacup recap Week 3

Obviously the story of the week was $NOW.

From a high of 8.15, it fell all the way to 4.11. Then it gave several wonderful bounce plays in between. Within the tribe, there were numerous people who benefited from the volatility. Even in the investacup competition itself, there were people jumping ranks by the hundreds! For sure those contenders were able to ride the massive bounce plays. Kudos to everyone for being able to ride the waves!

Personally, I was not able to maximize the NOW bounce since I was away from the keyboard on both times that the bounces were materializing. When I got back to the computer, the price was already above the optimal buy point for me. So I just let it go and looked for something else.

Remember, the stock market is not like Pokemon. You don't have to catch them all. You can afford to let some of them go. 

With that in mind, my system selected several other stocks that were also ripe for bounces but would theoretically move in a much more controlled manner. When I say more controlled, the move wasn't supposed to be moving up and down 5-10% in a matter of minutes. Too much excitement for a virtual competition. My stock picks for the week were SECB, MWIDE and again, CHP. 

This week, I'll be focusing on CHP. AGAIN.

For some strange reason, it gave the exact same pattern during the morning of 10/12 (Figure 1).

Figure 1

Could it give the same result? Looks like it for now. We shall see what happens next week. I've placed my position (1.98 buying) and possible target prices (Figure 2). Those target prices are just there for my reference. I'm already prepared in case they don't reach them. Make your own plans.

Figure 2

Ranking after week 3. 

Milestone 1 achieved --> Don't be in the negative. 
Milestone 2 achieved -- > Be in the top 100.

Dare I try to reach Milestone 3? Be in the top 50?

The tricky part though is making sure that I don't go down in rank too much. EVERYTHING gets tougher from here on out. For sure all the traders in the upper echelon of the competition are all in a class by themselves. Just being in the top 100 is a win already in my books. 

Investacup recap Week 2

The dynamics of the current competition is vastly different from the first Investacup competition. The first season had numerous uptrending stocks. Buy on breakouts, trend following was the name of the game.

This season the main theme is bounces. Everywhere you look there are downtrends galore. So it's more on buying on supports and bounces. It might be a downer for people but if we take it for what it is, it is an incredible opportunity to practice bounce plays. 

This week, let's focus on one particular trade:

CHP bounce

For this trade, I refer to one of boss Zee's previous trades (Figure 1). SSI 11/2015. 

Figure 1

That trade of his has always fascinated my processors because of it's execution and the percentage gained. So this pattern has been burned into my core memory and I swore to trade it everytime I see it. 

Enter CHP on Sept 28.

It made a similar cute candle after a strong downtrend. I entered near the close and identified two parameters seen in Figure 1. The TARGET and the CUT prices. Most people only create the former and forget about the latter. Rookie mistakes. 

Figure 2

The next day started out slowly. The price was hovering from 2.42-2.48 the whole day. Not bad if it was going to mimic the SSI pattern. As long as it closed above the close of 9/28 I would have been happy. 

But something peculiar happened. 

Right near the close at around 3pm, buying pressure suddenly increased and the price skyrocketed until the close. It closed at 2.7 just a few flucs away from my 1st target (Figure 3). 

I did a little quick math and thought that 2.7 was near enough to my target price and the way that the price moved during the close unnerved me a little. So I sold everything just to be on the safe side. The risk/reward wasn't worth it anymore. 

Figure 3

Since this was a virtual competition, it was easy to sell everything at the close. 

CHP helped a lot in boosting my ranking from negative to positive again. I had a couple of failed bounces again during the week but that's the way bounce plays go. 

Ranking after week 2.

Milestone 1 achieved --> Don't be in the negative. 
Here's to hoping I reach Milestone 2. Be in the top 100.

Investacup recap Week 1

Here is my one word summary of the first week of the Investacup competition. 

TERRIBLE. 

My processors were scrambled adjusting to the max of 3 positions in the port. Every time I take a look and see extra cash, there was this tendency to look for something to buy. My usual strategy of adding to my current position couldn't work anymore. Also, the lack of having GTCs to wait for the price to hit my buys was a factor as well. Frustration was kicking in and that was a very bad sign.

So I immediately did a purge for a day. Sold all positions and looked inward. Took some time to reassess my system and strategy. Remembered that this was just the first week so there is still a lot of time to catch up. 

Question is, will I be able to make it? 


Ranking after week 1. 

Focus on what is important

Some people question me why I choose to be a hands on parent to the little robot. Why not get a driver to pick her up at school? Get someone to look after her during the day time? So I can focus more of my time on trading.

I don't subscribe to that line of thinking. 

I admit, sometimes there is a twinge of regret when I can't execute during the times that I pick her up in the afternoon. But the feeling always disappear whenever we play our little games during her dismissal time. I would pretend to not see her coming out of class and always be surprised that she's already right beside me. Or we would play a game of chicken to see which one could spot the other first. Of course, I let her win all the time, because that's what parents do. The smiles that she gives me every time I pick her up always brighten up my day. 

Once she asked me what I do for work. I stopped cold in my tracks. How do you explain trading to a 7 year old? I mean, seriously, how would you do that? It's not glamorous or easy to explain unlike a chef, fireman, policeman or an astronaut. So I showed her my screen, with the orders and all. Opened up some charts and told her that they help me decide what to buy and sell.

White is good. Black is bad. We want white bars so we can sell it higher. 

I showed her some charts (funny line drawings she said) and told her about the movement of a stock.

With an extremely puzzled face, she stared at me then said OK daddy and left. Had a pretty good feeling that she didn't understand a word I said. 

After about a week, she gave me a drawing and said that this was her dream. She was sleeping in her room and there was a something about a kitty trapped in a heart or whatever and she saw some words on the wall. I kid you not, BID and ASK! 

BIDS and ASK!!!!!

Looks like there is a future for the little robot.

So to all those who are asking, I love my situation. I get to spend time with the two most important people in my life and even hit my year end milestones during the first half of the year. Even if I didn't trade until 2019 I would still be alright. I just made new ones to challenge myself more. The only reason I am still trading is because at this point in time it's already an addiction. To see how far I can push the envelope so to speak. I've even expanded my horizons and trying different markets.

Once you get past a certain amount in your income, not much will change any way. Having five million or ten won't matter. What matters most is how you live your life. Is it free of worries? Are you able to spend it with the people who matter the most? Are you able to make a difference in the world? That to me is the most important thing. 

Beauty in simplicity: TBGI

I like to keep things simple. 

Whenever people ask me how I make my plans, on my buying and selling points, they would always be surprised by how simple it seems. Usually there are just one or two trigger points that I watch out for. 

You can see it in the charts I post. Minimal lines. Just one or two boxes at most. Sometimes none at all. Seeing too many lines just gives the impression of clutter and gives me a mental image of limiting a trade. Not giving it room to make it's move.

Yes, my plans are simple. But that does not necessarily mean that it is easy to implement. There is a big difference in the two. 

Take for example my recent TBGI trade. 

This entered into my personal scanner when it was making a tight range as shown in Figure 1.

Figure 1

My plan was just to buy when that yellow box breaks. So on Aug 2, I bought at around .58-.59 and had to cut when it didn't follow through at the end of the day.                  

So I adjusted my plan as shown in Figure 2. This time I moved the buying area to .60 since that was the high of Aug 2. 

Figure 2

So on Aug 3, the stock made a nice strong move again. I followed my plan and bought my shares at the .6 breakout point. All in one big tranche if I remember correctly. There was sufficient volume per fluc to accommodate a good enough size.  

Figure 3

When it closed strong but below the recent high of .66 I made a mental note to sell at .66 on the next day. That is unless it made a strong move and made a breakout above it. Happily it made a gap up move and I just switched tactics to trail stops. Keeping in mind that there was a bigger resistance at .84, I wanted to see if it had enough strength to reach and break it intraday. 

If it only made a breakout of .84, I would have added a new milestone of having a 7 digit day change in one port. But alas, it wasn't meant to be. I sold most of my shares at .78-.79. Not bad for a two day hold. 

Caution is Essential

The past few months there has been a drought in breakouts. The usual breakout trader would be very very hard pressed to make some money. 

However, the market has given several wonderful bounce play scenarios. Granted, the bounce plays we are currently experiencing are very different in structure from the usual bounce plays. Those bounces came from a recently concluded super play or parabolic play vs the ones now which are in a downtrend. So the two bounce plays have vastly different rules on how to play them.

The previous paragraph highlights one of the more important things that most traders overlook when buying or selling stocks. The proper identification of plays will help to temper expectations. Bounce plays in an uptrend will always have more strength vs bounce plays in a downtrend. The same is true for breakouts. This is key in making successful trades.

Here are some recent examples:

DD 6/22/2018

This previously much loved stock has fallen into hard times in the past year and a half. It has been stuck in a slow downward spiral and has been looking for a significant bounce. For chartists, one reason for this could be because the prices were far from any strong supports. (Figure 1)

Figure 1

Now on this particular week, it suddenly picked up it's freefall to oblivion. It broke down from S1 and was going to hit S2 and maybe S3 as well. My sensors were screaming for me to place some orders since the opportunity was too good to pass up. 

Since S2 and S3 were also very near psychological supports of whole numbers, 21 and 20 respectively, this could be a good signal for bounce players to get in. During the morning, S2 seemed to have held and was showing that just maybe the selling was over. Several tranche buys were deployed near S2 and conveniently eaten up.

Figure 2

At the end of the morning session, the price rebounded very well and was moving according to plan (Figure 2). Since it already went up by a good percentage I set my initial tranche sells at 24, 24.5 and 25. In the afternoon session, only a partial shares of 24 were hit and the price seemed to be going back down. In normal instances, I would have held and waited EOD to see what would happen. But since the little robot's school already started again and her schedule has me away from the keyboard from 2pm to 3pm on this particular day, I had to make a change in strategy and changed my exit to a tactical one. 

Again, my confidence in these kinds of bounce plays is not that high yet so I cannot risk leaving my positions open especially when I cannot monitor them. So I sold it all at a much smaller gain than the one posted above. 

MWIDE 07/18/2018

This stock has been in a choppy uptrend and finally made some waterfalls since June. On this particular day, much like DD, it increased it's breakdown speed and even made an iZS on the weekly. However, it was seen to hit a particular support area as seen in Figure 1.

Figure 1

For me, this was a good place to put in my first tranche buy. Also, one scenario that my central processing unit came up with was it might make an iZS intraweek but close above the 100ma by end of week. Not a bad return if that does happen right? 

What more if it reaches the 20ma daily? Or even the 50ma weekly? Those are just some of the scenarios that were in my plans. Pretty good RRR I'd think.

Unfortunately, like the DD trade, I had to sell early because of the little robot's schedule. Though I wasn't able to maximize the profits on this trade, everything still went according to my scenario planning as seen in Figure 2.

Figure 2

Some people might say that I should have taken the risk and held on to my positions in the event that my plan did push through as what happened in the two instances. Yes, that could be true, but in the current market and my current situation, I was more inclined to err on the side of caution. 

These were new plays that were being incorporated into the system and the learning part was the most important thing for me. Any potential profit lost was acceptable since my processors need to get the required reps first to fully integrate it in my system.

Added bonus is having the peace of mind that I wasn't risking a lot while I couldn't monitor the stock movement properly. 

Trade dissection: ISM

Welcome to another of my trade dissection posts. I'll try to post more of these in the future. Just need to make more trades that are worth dissecting.

First of all, I purposely didn't trade this during the time it was still in the yellow box (Figure 1). 

Why not? It's because I didn't understand the setup. I have a general rule of trading only something that I understand and know well.

Yes it was going to AOTS soon. But for me it could still trade within a range since it's too close to the identified recent resistance for me. The reward wasn't as good. So no trade yet however it was moved to my watchlist.

Figure 1

After breaking the identified resistance, I was waiting to see what it would do next. I made a box and visualized what it could do (Figure 2). My bias was it would go down and hit the box bottom and then make the next move up. Sort of like a breather so it can gain some more strength.

Figure 2 

This (Figure 3) was the reason why I was not convinced of it's move yet. Switching to the monthly chart, we can see that it seemed to hit the darvas and 100ma resistance.

Figure 3 

Aaaaand Ms market proved me wrong. As can be seen in Figure 4, it made a breakout from the identified box and would then be halted. I missed this trade because I was too focused on my bounce plays for that particular day (DD and VITA). No worries though, I know that if a stock is really good it would still give buying opportunities somewhere down the line. Just have to wait and make the necessary plans.

 Figure 4 

So what happened next was this had all the ingredients for the sell on news phenomenon as seen in Figure 5.

- you start with the double serving of disclosures and trading halt
- a generous serving of gap up. about 8%
- add in a sprinkle of increased volume. More or less 6M shares worth in the opening minutes
- and finally a dash of adrenaline and danger for those who got too excited and would buyup

It hit the next identified resistance in the monthly which was 2.6 and went crashing down.

 Figure 5

After watching everything crash and burn in the early morning I waited for things to settle down. As usual, I made plans and identified the potential bounce areas where I would wait. 

Went and took a nap as well.

Woke up at about 1030 earth time and was pleasantly surprised to see that the price seemed to be holding very well(Figure 6). Switched plans to buy at the unchanged or near it.      

 Figure 6

And the rest was history (Figure 7).

 Figure 7

Wasn't able to sell at the highs though. My schedule right now is causing me a lot of problems. But I was able to salvage a good enough gain. 

Ms Market will always reward those that can make flexible plans. Those that can make changes on the fly and execute them. Opportunities are still out there. It knocks on the doors of those that prepare. Are you prepared?