Trading Review: 10-29-2015

Main Account: -$641.

Back Account: -$53. Traded APDN really well overall. Was a fraud hit piece out and was getting long into washes and taking profits quickly and then looking to get long size once trend established. Unfortunately took two stops on size which brought me back down to break-even. If there was mistakes it was going into size all at once, rather than scaling... But I did a good job of waiting and being patient so I'm not too worried.

On my main account it was just the mistakes which are becoming to usual. This one was somewhat less stubborn, but still the same..
(1) Stubborn.
(2) Chasing price on open.
Those two mistakes lead to being uncomfortable with any reasonable stop placement.

Thing is that eventually my plan worked on STRP and my washout buy zone ($30) had a nice $4 bounce off it.

Goal for the next week is to place a stop-loss before EVERY trade.

Playbook Review: 10-28-2015 AKAM

Title: Big Gap Down and Bounce Play

Strategy Description: With a big gap there's obviously three things it can do. Trend down, bounce and squeeze, or range bound. It's about using price action along with news, float short etc to determine what's a likely scenario.

Yesterdays close was around $75, so a pretty significant gap down. Earnings interpretation isn't a skill of mine so for now not too worried about that. But with an ATR of around $2.0 it seemed reasonable to begin to fade it as a starter position after it had moved $2. So as it put in a bottom I put in some bids with a stop-loss below the lows.

I was positioned correctly for the initial bounce, but didn't take any sales despite that it was testing vwap and resistance from the earlier bounce; and hadn't quite changed trend yet, aka it needed more time!

Was eventually stopped at the low before a clean trend change occurred and it reclaimed vwap.

Things I would change about this trade. I would start in smaller, with a wider stop-loss and definitely take sales in resistance, then I would look to add back on trend change; again taking sales into resistance (vwap ish); then on a reclaim of vwap I would try and add back, this time even larger for a move to the high.

Playbook Review: 10-28-2015 HOT

Title: Takeover with Cash and Stock.

Strategy Description: Usually the really good opportunity can lie in the acquiror rather than the acquired company. But in this case the acquiror wasn't too liquid. As a result while it is still reasonable to expect some sort of selloff potentially, you probably wouldn't necessarily want to hold it for multi days as a swing trade as it's unlikely to draw the same sort of risk-arb selling.

Try to start in short on a pop on the open, ideally using premarket levels as a guide.. But don't expect too much of a pop. Then as you see selling add, using that high as the stop-loss.
I didn't execute on this one, but it looks like it was somewhat more difficult to execute on give the speed that it dropped out at, but shorting near the opening pop yielded good risk-reward.

Trading Review: 10-28-2015

Main Account: -$820. Forgot to take a screenshot but PnLs were:
AKAM: -$65.
AVXL: -$767.
DGAZ: -$135.
FPRX: +$158.
MCUR: -$13.

Really disappointing day. The obvious mistake is on AVXL, I had some solid conviction in the idea and was waiting for the price action to play out. I was relatively patient on this, compared to what I normally would be, so am quite happy with that... But as it came close to the lows a 20k bid started getting taken out, so I hit it with a bit too much size. (Similar mistake to one's that I usually make, that is, sizing in near the lows and too quickly).
Then as it rebounded I was down a bit more than I wanted (which would cut me out for the day) so I opted not to take it off, and didn't take the stop-loss (in hope that it would pull-back and I would be able to continue trading for the day). Obviously it continued and I ended up stopping near the high.

A few other comments about the trades I took:
AKAM: Didn't take any sales into resistance, which was the obvious spot. Was a nice trade, just exit not managed properly.
DGAZ: Trade completely didn't work, and had really big size on because was a good trade. Really well managed trade overall. Really like it on the long side when I stopped but was done for the day because of AVXL.
FPRX: Couldn't take as much size on this as I wanted because of AVXL. Wanted twice the size which would have yielded around $100 more profit.
MCUR: Was up really decently and didn't take any sales when it started peaking out...

Overall, if I had taken the stop on AVXL where I should have I would have only been down about $200-$300 on the day, a lot more manageable than the $820.

Playbook Review: 10-27-2015 DGAZ

Title: Tight Consolidation on Wide Ranging ETF

Strategy Description: This is exactly like any other play I would make on NUGT or UVXY but I'm not quite used to the smaller range on this one (i.e. a tight consolidation is 10c rather than $1).

As you can see it offered plenty of buy spots and chance for some solid pyramid-ding into a sizeable position.

Trading Review: 10-27-2015

Main Account: +$801.

Pretty solid day, and am very happy given that I want to be trying to string together consistency. There were a bunch of plays missed and/or underperformed on... But like I say that's okay because it's the consistency that's really important at this stage.

IBM - Was one of those typical midday news reaction trades. Ended up pulling back and stopping me out, but managed to trade around a core somewhat and lock some in before eventual stop-out. My eventual stop-out was a fakeout, but I am okay with that because not only was price telling me I was wrong, but also time (being a bit over 30 minutes from initial news).

QUNR - A really nice short on this parabolic (on the second lower high) stuff. Was a bit oversized though, and didn't get the size off quick enough. Was up about 400-500 at the peak, where I should have been downsizing. As is pretty usual with these short parabolic plays it pulled back to a zone where it began holding. It took a long time to bounce off that zone, but that was the spot where there is no longer a huge edge to have size short.
Gave the trade one more go, which lost about $100 on.

GRUB - Crazy play! Was a pretty typical gap down, then reclaim vwap and trend higher type trade. With the focus on consistency I took sales into the highs and didn't really revisist. It broke through the highs and went another couple of dollars which was a really shame. Really good job selling into the highs. Two things I should/could have done better was getting long more size after it confirmed the hold of vwap (I could have risked around 10c on size, rather than 30c on my position that I had), then sell into the highs. As it retested the highs over and over again that was the signal to re-establish for the b/o and then add on b/o, hence catching the eventual big move.
There was one more trade on GRUB and that was shorting into premarket resistance which it flew through in quick parabolic manner. This was a poor trade. You can't really use stop-losses when shorting parabolic, and if I was to use the stop-loss then I needed to revisit the trade idea. Was a really nice fader off the highs.

HLF - A nice setup and really good example of adding size over time... I added as it was going down and I could trail my stop-loss. Had about 400 shares with a risk of about 10c so that's really nice! Unfortunately covered them all about an hour before a $1-$1.50 pull but that's okay it felt like the trade simply wasn't working enough.

SRPT - Bought in anticipation of the bounce/breakout but didn't come. Probably not the greatest trade idea in the world, in hindsight. Should have been more patient.

HA - This was too much of a chase and didn't lock any in.

BIDU - Took the short in yesterdays high with a stop above and was easily stopped. Then revisited the trade when it peaked out. Solid trading.

FB - Was unfortunately stopped at the lows. I had stop-loss 20c (10% ATR) below support so I think this was just somewhat unlucky. Given it was the open, and I always try my best not to take stops on the open I possibily could have had the stop-loss a little wider.

NUGT - A really nice trade off the break of midday consolidation/triangle. Managed to get some size on it with low risk, and covered remaining half when it wasn't working. Never had any follow through so this is a decent winner given the tiny magnitude of the move.

BABA - Really happy with the way I traded this... But could have stuck with the idea and got even more size on it. One thing I'm super super happy about on this trade is recognising the levels as they changed intraday. As it began peaking out at 81.50 within a downtrend, I was patient and put a limit order to short at 81.35 with a stop 81.56 and shorted size there. This was a really really good trade and netted about 10R.
The thing I could have done better was adding back on new lows etc, but overall happy.

Trading Review: 10-26-2015

Main Account: -$1093.

Back Account: -$2532.

Late posting this. But just wanted to post it to highlight a MAJOR mistake. I didn't have massive size on TREE and I was anticipating risking about $1-$2 on 150 shares in back account (and 50 shares in main account) but it was super illiquid so when it spiked midday I gave it a little time and in 10 minutes I was out of the money by about $8 or so.

Playbook Review: 10-23-2015 RLYP

Title: Big Gap Down Squeeze Out and Fade Off.

Strategy Description: Ignoring the fact that it actually moved back to the high at the end of the day... RLYP had a typical massive gap down, squeeze out, and then fade off pattern about it. I have adjusted the chart to ignore the end of day action to show why you would get that impression. The failure midday, and the magnitude of the move on the open of the gap down day suggests it (although the uptrend was more consistent than a squeezer probably).

So on day 2 when it gaps up it provides a gift opportunity to short. Especially given the proximity to the prior days high (for defined risk).

Playbook Review: 10-23-2015 FB (2)

Title: Buying a large cap breakout that's "ruined" by a large gap up.

Strategy Description: FB has been a hot watch for a breakout over $99.20 to all-time highs, then through $100 for a "century" breakout. Now this primo setup got basically ruined by a big gap up to $102-$103. So how to recover from this? Firstly, still definitely want to be looking for long opportunities, but buying anywhere near here would be a decent chase.

One key point is that want to be weary of this being a false break. The gap up could create the selling pressure, then the overhead supply, and the downward momentum to push it back below the breakout level. However, as with everything there should be some bounce on the way if this is the case, and how it reacts to those bounces can be very telling.

In this case the ATR is $2, prior all-time high is $99.20, and obviously $100 is a significant level. The low turned out to be $100.14, which is pretty close to a measured move for a move back to the high :)

Playbook Review: 10-23-2015 FB

Title: Shorting Over-Extended Gap up on Large Cap.

Strategy Description: Felt that this was important to go through because I was relatively nervous shorting the breakout and strength.

$99.20, and then through the $100 was a pretty significant breakout for FB. In fact I would expect it to end up going through to >105 soon given the "century" rule. Based on this bias I was really hesitant shorting the gap up against the premarket high, despite the well defined risk. I ended up doing about 1/3 of what I should have and holding for about 1/3 the distance I should have.

I think the key distinguishing factor is simply the size of the gap (about 1.5ATRs and a decent distance away from 8EMA on daily), giving those who bought in anticipation of the b/o a chance to lock in some profit. Then the weakness in the premarket gave the opportunity to get a bit more confidence in the setup (I was covering short where I should have been looking for spots to add now that risk was so well defined).

Playbook Review: 10-23-2015 CYH

Title: Buying Dip to Support on a Strong Stock

Strategy Description: Stocks that have temporarily peaked don't just fade off in one wave (provided the original up wave was strong enough). They will likely find some support somewhere, have a little bounce before either continued fade before the next leg higher.

In general the bigger the pulback, the better the risk-reward, but the lower the probability. That being said, buying support is such low risk that most times it will be good reward.

In this case on CYH the opening move was pretty big, over 1ATR, and it was relatively consistent; allbeit a bit move. After a strong move want to be looking for a spot to get a re-entry into the predominant trend. As a general guide vwap is a good spot, however it is not a definitive spot.

Note that this is a different play to buying a dip within a consistent trend. This is one where the dominant trend has become overextended and looking to buy a pullback. It should be a profitable strategy, even if it doesn't resume the trend. This is because you should end up with a really solid entry, and be able to take off some risk pretty quickly into a pop. Either that or at the very least it is very well defined risk.

The key here to provide liquidity on the way down. It is possible to add on favourable price action... But you don't really want to add too much because the key is to focus on the solid entry, rather than play the momentum.

In this case there are two support lines. VWAP is around 28.60 as it was coming down, so it was a relatively decent breach of vwap; but still only a 1/6th of ATR breach. A good entry around $28, risking 20c would have caught nearly a $1 bounce.

Playbook Review: 10-23-2015 NFLX

Title: Due for Bounce, Gearing Up Near High, On Prior Two Days High.

Strategy Description: NFLX had taken a wee dip on the daily and was bouncing off support. With the market up it's definitely due for somewhat of a retracement.

Basing off support yesterdays high was 99.90, and the day before that was 100.34. This was roughly around the peak that was forming today for the morning session so was the perfect place for it to grind up, test and breakout.

The part I really like about this trade is the execution of it. I bought a tiny little bit on the initial b/o, with quite wide risk (to give space for the retest), then as it was retesting and sort of confirmed the hold or at least gave a tradeable point to determine if the breakout was holding. At this point I was still quite small. Then another wee add as it failed to selloff about 15 minutes later, still only about 1/2 size at this point. Then a final add another 10-20 minutes later as you know it's a true b/o with well defined risk.

On the full position size was risking about 30c a share, with high probability of success; despite the original low probability of success buying the b/o with small size. In this case full size wasn't huge (compared to other high conviction setups I have)... But the way I increased the size as becoming more confident maximised the expected value of the play.

Trading Review: 10-23-2015

Main Account: +$1246.

Aside from VRX I traded extremely well; then on the flipside I traded VRX really poorly! Problem is to be added to the list of hard rules... Except the problem is that it requires a lot of on the spot decision making which doesn't really apply well to a list.

What happened with VRX was that it was behaving perfectly so I sized in... But it just wasn't a time to size in. Sizing in when it's not appropriate just isn't good. In this case my first entry 116.80 (which was a bit of a chase because I missed entry in 115s, but that's okay cause it was chase size), but then I ended up with an average of around 118.50ish with adds... So when the breakout over previous high failed high (119) I wasn't in the proper position to take any off. Basically need to look after average. IF I had sold into prior high and then looked to revisit and add back (maybe even larger) on proper price action. I actually nailed the way you should be trying to get size on NFLX so I will definitely have a solid review of that. It wasn't on the open so I had a lot more time to get it right, but was very patient.
But I think the general jist is that there was a bit too much performance pressure, despite it being a solid setup there was nothing locked in and ended up top heavy despite the trade original working.

So the hard rule is that a trade has to prove itself over time and over price in order to get adds.

Playbook Review: 10-22-2015 CANF

Title: Piece of Trash Float Rotation Gapping Up After Big Move Now on Backside.

Strategy Description: Want to really pay attention to the premarket action. If it's weak and looking somewhat dead it is probably setting up for a complete fail and it can go red on the day.

Unfortunately these kinds of trade are somewhat counter-intuitive because the risk-reward doesn't somewhat make sense. So you want to start in, in the premarket or on the open with really really wide risk, and this will allow you to lock some profit in to put a bit more size on it later.

Ultimately the best trade will come on once it's dead, has been given the low volume kiss of death, and is consolidating near the lows that's where you want to put the size on.

Note that you need to be aware and on the watch for stuffs, so don't want to have stop-loss right above the resistance.

Playbook Review: 10-22-2015 CHLN

Title: Shorting Float Rotation Opening Parabolic Day 1.

Strategy Description: The real key here is to not step in front of the move too early. When it is up around 100%+ you should begin looking to short the over-extensions only as a starter.

Provided the opening move was steep enough, you are looking for a character change and then short all pops aggressively against the high for a move to sub-vwap. Consider the fact that for it to retrace anywhere near vwap given such an extreme up move basically means all the buyers are pretty top heavy.

Playbook Review: 10-22-2015 RLYP

Title: Gap Down and Squeeze!

Strategy Description: RLYP had bad news yesterday, bad news premarket, and is pretty beaten down on the daily chart.

I was short biased looking to short pops originally given the premarket weakness and the key levels that were being breached. But trades like these it's important to let the price action tell you what's going on, and if counter-trend trading with small size be very selective on prices.

In this case the signal of true strength was when it began holding above the opening high. While initiating the position on the reclaim of the lows and then vwap, at that point you should still be quite light with a wide stop-loss. However the adds come as it begins to hold new highs. and you can put on size as a momentum lot (meaning that some has to be taken off pretty quick).

The typical pattern for these stocks that seem like pieces of trash are that they will gap down, trend up, squeeze out and then resume the downtrend. That's why it's so important to get some size off into up moves.

Trading Review: 10-22-2015

Main Account: -$633.

Back Account: -$1655.

Real silly day. Silliest day I've had in a while. Somewhat annoying because there's plenty of opportunity at the moment. It is pretty obvious from looking at the PnL and that fact that it was negative on everything that I simply just wasn't onto it...

To be honest I don't really have much to say about it. I didn't have the right amount of money in main account but it cleared halfway through the day, and I put on the 3 trades that I wanted to immediately, so naturally they were destined to fail.

And didn't trade well on back account at all. Went to full size too big, chased in the early morning. And was too greedy on profit targets (on RLYP) but too tight on stop.

I have rules (obviously) but I think creating a "master list" of rules no bigger than 20 to literally live by would be helpful. To start with pretty obvious ones to add to list from today.
(1) Don't chase price pre 9:45. Pick prices before 9:45 and probably before 10. If concerned about missing out consider establishing the position premarket.
(2) Never go full size immediately. Go into it in at least 2 lots.
(3) Scale down from full size pretty quickly (don't get greedy). Trade around the position holding core.
(4) Always have a stop-loss even on starter positions.
(5) Always consider and re-evaluate the relationship between target and stop-loss.
         - Can I stand the draw-down on current position to stop-loss (lighten up)?
         - Is stop-loss too tight (aka should take some off and widen stop-loss)?
         - Is my stop-loss where I should be adding to position (in which case take some profit so in                     position to add back)?

Playbook Review: 10-21-2015 ENDP

Title: Bouncing a stock crushed in sympathy without any direct connection.

Strategy Description: ENDP got absolutely crushed on the VRX news, which kinda didn't make sense given that the allegations on VRX were company specific (at least for the most part), but of course market can stay irrational for as long as it likes. However it does make a preferable bounce candidate.

Aside from that just the same as the VRX bounce play, except that the tape should be somewhat cleaner/less volatile with less headline risk, so you can get a little more aggressive with starters and with anticipating trend change. Analysts will come out and defend at some point as well which can be important information.

Playbook Review: 10-21-2015 WTW

Title: Shorting for a Massive Move on Day 3 of a Supernova after Opening Flush Providing Entry

Strategy Description: Obviously being day 3 expecting the full fade off is a different part of the play. This post is to focus on getting the good but well defined entry.

This is effectively the gap and crap, but it fills all the sellers higher. $19.16 was the high from day 2, and it was over that in the premarket and on the open it began to rocket higher on volume. As the offers lift and it begins to breakout someone will sell a shitload. This is the signal to start in, however for more clarity, just short the living shit out of it once it gets below a key level and you know that it was the flush out higher. Being day 3 you have a lot of confidence in the entry and are okay with slightly wider risk.

Playbook Review: 10-21-2015 $KLAC

Title: How to Short a Takeover Company with High Probability and Good risk-reward.

Strategy Description: Looking at a company that has been taken over for a fixed price as an all cash deal. Important to remember that if a takeover company is trading right on the price people may be anticipating a bidding war.

The way to counter this risk is to only short a company that has parabolic'd into the takeover price after starting initially quite a bit lower. Expect a bit of a flush through the price, but ultimately it is an amazing level to get size on the short, and cover most of size quickly for a scalp before catching a move lower.

It is a relatively shorter term trade idea. You don't want to be holding size for too long.

Playbook Review: 10-21-2015 VRX

Title: Absolute Banana's Move Having Bottom Drop Out. How to Play Bounce.

Strategy Description: Have talked about this in trading review but wanted to go through it even further because I completely misplayed it!

Step 1: Anticipate how far down it could go as max pain. Base this off the news, and off the sector volatility etc, and the stock volatility - how far does it move on monster days?
Step 2: Trade feelers counter trend with a focus on locking profits and using wide, but not undefined stop-losses. Keep the feeler size very small (because of volatility). The goal of the feeler trading is not to catch the bottom and make lots of money, but rather to watch it a lot closer and lock in a tiny bit of money to be used as risk for a larger position once the trend is changing.
Step 3: Don't get fomo!!! Or any other emotions!

You can see on this VRX chart that once the trend had truly changed (around say $105) you could just put on multiple momo lots and trail stop-loss, and lock in a home run. But the key is to focus on not losing money prior to this moment, and to lock in a little bit to risk at this point where you confidence is increased.

Remember if putting size on the momo lots that you need to be taking profit quickly on some of the position and trailing stop-loss quite aggressively. Buy dips, sell pops and gradually increase position. Eventually if the trend continues it will turn into a monster!

Playbook Review: 10-21-2015 VMW

Title: Clean Trend-Trend Day 1

Strategy Description: With the VMW gap down on earnings it started to look somewhat over-extended on the daily so I was prepared to play it for a bounce but my preferred strategy was to get short. On the open I was looking for a pop and hold lower to short, but it was a secondary idea and wasn't paying too much attention.

About 10:15 it was pretty clear that it was in a strong downtrend but that it wasn't "flushing out". Was more a consistent trend. At this point you want to look for ways to join the trend with a tight stop as a momentum position, can just start in tiny with a wide stop and add to a winner and trail stop-loss. However the ideal setup is the flags drawn where it makes a new low and risk is really really well defined! Each of these flags should be used to get uncomfortably big; especially if profit has been locked in prior on the down move!

A trade like this it is really important to hold some until the trend ends. In this case there wasn't a signal to cover until around $53.50-$53.70 or $52.50 on the speed up, but the case could be made for covering up around $56 when it broke the downtrend, only if the short was re-established on a new low.

As a note, I think the correct decision around $56 would have been to stop on a reclaim of that prior low of $56.20. The nervousness around times when prices is testing regions where you will be stopped out can be reduced by covering some size into downmoves.

Trading Review: 10-21-2015

Main Account: -$2724.

Back Account: +$3076.

Somewhat frustrating day; but I needed a wake up call on taking starter positions with undefined risk. Even a starter position can end up being nasty! That being said, I didn't get the starter postion methodology right; but point is that it doesn't allow much room for error. The kind-of ironic thing is I am trading really really well at the moment, just need somewhat of a strategy modification.

There's really no excuses for the loss on VRX. Funny thing is I nearly shorted it before it started plummeted but thought it was already too over-extended. What basically happened is that I had intended to start in around $120 and ended up starting about 130ish when the tick chart did a slight blip, and then added around 125ish(?). My first position was 50 shares, which given the range it was already having is quite large. Then when I added I was in 100 shares; so similar mistakes to WTW yesterday. Underestimated the range, and was too large. Overall though the fundamental strategy was kinda flawed with the starter position; what was I gunna do, hold until zero? Keeping size small (or as in this case I made a mistake and was about medium size) isn't quite enough to control risk well enough.
To me a permanent adjustment to my starter positions is required. Kind-of had a brainwave with regards to this.
It is unreasonable to take away my start positions completely. I get them right 19/20 times and when they work they put me in a great position (with some profit to risk on sizing in) to crush the final move. The simple adjustment is that instead of having undefined risk, define risk really wide. Usually when you take a position you put a stop-loss above resistance or below support. For starter positions put it at the next level and allow for a flush of that level. At this point you certainly know you're not quite on the right track and if eventually proving to be right there would be an opportunity to redo the trade.

WTW finally nailed the short and rode it the whole way down... But I didn't have the same size on it I did yesterday which is a real shame. Wanted to short in main account as well but couldn't get shares. Really really happy with how I traded WTW. Reason for being so happy is having the right read and the conviction to hold until the close or until proved wrong.

Playbook Review: 10-20-2015 ERII

Title: Shorting a Massive Gap up with Real News

Strategy Description: ERII had a massive contract worth about the same as the current market cap so a 100% move actually seemed somewhat reasonable for once. Now everyone was aware of that and of course when everyone is thinking the same thing it usually doesn't happen.

A couple of comments about ERII:
(1) The daily chart is pretty beat down.
(2) $7.75 a really big level on the daily.
(3) It's not low float. About 30m or so.

So going into the open I was planning on buying a flush to the low/mid 6s for a rally back to the highs. Price action told a different story. Note that I was prepared to short it, but really wanted it quite a bit higher because of the strong premarket action and also the news. That is why I didn't take the short into the opening push; and I'm okay with that.

Now here's where I made a few mistakes:
(1) I tried to buy a pullback at a relatively arbitrary place. Should have waited for a somewhat better setup, was a bit jumpy and stop-loss wasn't too clear.
(2) The pullback from the new highs to the opening market print was a sign of weaknes. It shouldn't have pulled back that far. I bought around here against the lows and added as it got above vwap (which turned into a vwap stuff). This vwap stuff was actually an amazing short setup. Where I stopped my long was the place to initiate a short with size against vwap(ish).

Playbook Review: 10-20-2015 WTW

Title: Shorting a Float Rotation Crowded Short on Day 2.

Strategy Description: This was a losing trade that I had the right idea on but under-estimated it somewhat, so want to go through it to see if I could have done anything better. I probably lost more than I should have, but given the size I had intended to throw at the setup it certainly could have ended up worse as well.

Coming into today I had 3 possibly scenario's in mind for what it could do on the open.

(1) Fail somewhere around yesterdays high ($15.09) either by lifting the high then slamming back below or just failing in that zone and coming off pretty hard.

(2) Gap and go on the upside for a soft gap fill (in the $16.2-$17 range) or hard gap fill ($17.22) and that would be the parabolic that would potentially mark the top.

(3) Would hold and grind higher continuing for a second day of float rotation. This would create quite a few tradeable patterns on the long side, but being day 2 you wouldn't want to get too aggressive.

It ended up being somewhat of a mix between (2) and (3). The opening drive ended up going far further than expected and it grinded for the rest of the day (not offering any tradeable long setups, except perhaps long into support) but at the same time not breaking down and reversing. i wasn't that far off with expecting it to potentially go to $17.20 however the fact that it went further than expected is what caused my losses, so by playing Monday morning quarterback am hoping to delve into how it could have been done better.

I had intended to short 2000 shares total as a full position size, so in my mind I was hoping to short 1/4 into the morning push. So I offered $15.94 for 500 shares. In hindsight this is obviously very low! But was it given what I was seeing at the time? I added 500 more shares at $16.94, and then stopped as it made a new high at $18.15. Facts for consideration:

(1) Yesterdays move throughout the day was $4 low to high. Reasonable to expect a $4 move the next day as well.

(2) Volume on open was bigger than volume on yesterdays open (bullish).

(3) $16.40 a level for soft gap fill zone.

(4) Starting into the morning push/parabolic is essential for getting low risk size on after it fails.

(5) $17.20 over/under was my idea for a place to limit risk to. It pushed straight through $17.20 without a moments pause and went to $17.80. Given this fact I should have been looking to completely cover up my position on a pull. The magnitude that it went through my risk spot proved that I was temporarily wrong.

I think point number 5 is especially important. Whether or not I started in too early or not is somewhat irrelevant. Had I covered on the pull at $17 (the pull low was $16.80, so that's pretty realistic) I would have lost $500 compared to $1700 on my eventual stop. So that's quite a difference. The other thing for consideration is that I could have broken down the orders even smaller by doing 1/8th at a time. Reason for this is simply realising that it's going to be tough trading the size I had intended to trade.

The other potential idea is that simply don't start into the parabolic. Thoughts behind this:

(1) When trading my usual size (e.g. 200 shares, starting into 1/4 means bugger all) I will always have plenty of bullets left and I don't mind eating the loss if I have to on the 1/4, even if it somewhat larger than normal. However, when I am intending to trade size; the repercussions of being too early on a parabolic entry are a lot larger than normal, and indeed a lot harder to manage the position and think rationally.

(2) This would leave to wait until the trend change is confirmed and risk is well defined to establish a position.

To sum up: I think it all comes down to size. Trading normal size I have no problem starting into the parabolic. However, when I am trying to absolutely hammer in something issues arise and losses/emotions will be bigger than normal. Accordingly I think it is reasonable to never push too hard on the parabolic and treat it like a normal position/idea until the defined risk trade occurs.

Playbook Review: 10-20-2015 $NUGT

Title: Overextended ETF on Little Move in Underlying.

Strategy Description: More or less the exact opposite of the trade yesterday about the big move in underlying and expecting the ETF to play catchup.

In this case NUGT was straight up about 1ATR while gold was only up a little and without any sign of a catalyst. It is important to realise a couple of things on this trade:
(1) You never want to have too much size on an etf like this when it's going against you, start in at very picky prices and wait until risk is defined then get full size. You can see from the chart it's pretty obvious when it finally breaks trend.
(2) Unless looking for a bigger picture reversal for some reason it is a scalp against the predominant trend; and therefore should have realistic targets. E.G a 50% retracement or vwap or something. Scale out because you don't know where the trend will begin again.

In this case NUGT opened with a big rally and moved just under an ATR (ATR=6.50ish) and moved to a high of $4.50 pretty quick smart while gold was only up $4. The most important thing to realise is that it's important that it's not grinding up but rather that it's moving up quite quickly and is due for a break or consolidation before continuing higher.

Begin into 1/4 by providing liquidity and anticipating the spot. Try get some of that covered on the first pull, and then add (being quite picky on prices) on the lower high. Using the EMA's as an indication for trend can be useful. You can see that after the break of trend it rallied right back to near the high, so being picky rather than chasing with the adds paid off.

Playbook Review: 10-20-2015 $HZNP

Title: Shorting Pop to Resistance.

 Strategy Description: HZNP is in a pretty strong downtrend on the daily. Recent lows are $16.22 and $17 is a key rollover level.

On the morning weakness it is pretty difficult to short it because you would consider that chasing, but the setup is quite nice and it is reasonable to expect more weakness. So the key is to be patient, wait for the bounce. The daily ATR is about $1.80 and on the open it moved $2.50 so a decent move.
The bounce was around $1.20, so against a decent move and failed right at resistance picture perfect and an obvious place to short given it was straight off the lows and nearly bounced around 2/3s of an ATR.

Playbook Reivew: 10-20-2015 TSLA

Title: Intraday Negative Breaking News Continuation Pattern

Strategy Description: Very very similar to the BLUE trade on the prior day. When the (negative) breaking news comes out on the stock you usually want to be seeing how the price behaves directly after the news. Sometimes it can be setting up for a decent bounce, other times it can be setting up for continuation to the downside.

Firstly it is VERY important not to jump in too quickly. For the continuation pattern you want to see evidence that it's beginning the reject from higher prices before beginning to short. As a guide, you would expect the next leg lower to begin in about half an hour from the initial spike, and therefore begin initiating your position at least 10 minutes after the initial spike. Patience will allow for better defined risk.

As it begins to reject start into position, only shorting into strength (to ensure good entry price). As it begin to grind a little lower offer out to get shorter into pops, this time risk should be pretty well defined. Then short a final little bit as it cracks and makes a new low. Cover accordingly into the wash. If it reclaims that low that's most likely your signal to either cover down or stop out.

Playbook Review: 10-20-2015 YUM

Title: Gap Up and Weak on Large Cap Stock.

Strategy Description: The news and size of the gap is somewhat relevant on this play. In this case it was a pretty decent gap (about 7%) on the news of a spinoff.

On a trade like this if you're looking for the short, you either want to short a pop to resistance (say the premarket high), or look for it to find new resistance as it did in this case at $75. I think this trade on the open against $75, but what I really want to hone in on is later on, when the trade starting working again after I had taken the stop of the remaining half of position.

You can see from the intraday chart that mid morning it is beginning to attempt to stage and uptrend but is repetitively failing at $74.80 which was a level from the premarket.

Two options for execution of the trade. Initiate a position near $74.80 with stop over $75 in anticipation of it failing trend. If you were quite biased on direction may do this, and then add as it fails trend and stop-loss can be trailing.
Or initiate some of a position as it fails trend, and then go full position size once it begins finding some resistance and stop-loss can be trailed to the trend break zone.
Then same strategy for both covering options. Cover portions on way down and hold some until trend breaks.

Trading Review: 10-20-2015

Main Account: +$180.

Back Account: -$1235.

Bit of a crazy day. Probably the biggest regret was not having a solid trade plan for WTW. Because I didn't have access to shorts on main account I traded it somewhat in-perfectly. I need to come up with a generalised strategy for scenario's like that. A good rule would be that if I need to have the order resting for longer than 5 minutes to get a fill then I probably should just swing the position with wide risk and take a drawdown but also have a big target. Is day 3 on WTW tomorrow so will be ready to put the hammer down. Now without a doubt comes the swing position.

Ultimately on main account I ended up running the WTW with a swing target and an intraday risk; which resulted in me not taking profit where I should have, and then stopping out at a place not consistent with my target. I stopped the short WTW out for about a loss of ($400ish?) where I was up about that at support when it hadn't cracked (aka the perfect zone to cover down some size if trading with intraday perspective). Then I switched to long with too much size and was topped (but that was just a bad trade).

TSLA was an absolute gift which I couldn't have traded better. Am getting a lot better at trading these breaking news trades in the middle of the day. Was risking about $50-$100 and added appropriately with profit locked in and caught a really nice washout.

Overall I traded ERII pretty well. Definitely did a better job of picking prices and as a result the stop outs (which there were a couple of) were a lot less significant. However, there was one mistake which resulted in drawing down main account from about +$400 to +$50, and another one which drew it down from about +500 to -200ish, so certainly could have been better. I also didn't quite have the right read on it. Hindsight it does seem somewhat obvious, but the news was "real" rather than the crappy news that these big gappers usually have; and I thought (still think correctly so) that the news was worth a 100% move. Will do a few trade reviews on this because there were a couple of trades that need to internalise.

Overall a general comment is that probably had a bit too much focus on ERII/WTW. Although they did provide a lot of opportunity. Missed a nice NUGT trade again, and YUM the same trade idea began working again after I stopped on first one.

Playbook Review: 10-19-2015 BLUE

Title: Trend-Trend Trade with Intraday News.

Strategy Description: This is a variation of the trend-trend trades where the news isn't yesterday or in the premarket; it occurs during the day.

BLUE is within a strong daily downtrend. It is somewhat of a consistent downtrend (rather than say a big flushing one, but I'm not sure if you would trade it much differently anyway). The previous recent low on the daily is $78.50 and the initial spike from the news takes it right down to that level.

Just like the breaking hit piece fraud reports look to short strength/pops (only) as it begins to peak out after the news. Looking for a rollover and a move to new lows. Ideally hit a lot more as it makes new lows and gets below that key level... But BLUE is somewhat illiquid.

And crack, textbook setup.

Again, notice the approximate time-frame. It took around 20 minutes of peaking out for it to rollover again, so no need to chase weakness and rush the trade right after the news. Waiting for the peakout allows you to avoid those squeeze backs when the news is garbage.

Playbook Review: NUGT 10-19-2015

Title: Gold Big Move with NUGT unchanged.

Strategy Description: Anytime you can define risk pretty tight on such a high ranging ETF it is a good idea to initiate a position. Of course depending on the scenario you can add once it begins to work and trend as well to further the risk-reward even more. So this was a real missed opportunity that I didn't take!

Gold was down $10 which is a relatively big move for gold. The ATR is about $12, and NUGTs ATR is just over $5 so you would expect NUGT to be down at least a couple of $$.

Yesterday's close on NUGT was $46.65 and it had a little gap down of about $1 (despite the big move in gold). So already should be thinking about anticipating somewhat of a fade-off on NUGT. However obviously can't just initiate a position there (or depending on risk-reward may wish to initiate a small starter). As NUGT pushes for green you should be anticipating the fail and short quite a bit there with a relatively tight stop-loss. As it peaks out add a little bit (because risk is now defined, although maybe expect one more failed push), and then add as it finally moves in favour.

Playbook Review: 10-19-2015 WTW (2)

Title: Shorting a strong float rotation stock that definitely doesn't seem weak!

Strategy Description: Consider a float rotation stock with a large gap up, positive news and after initial move down beginning the annoying next wave up; where if it gets above vwap you know it's going to at least test the highs.

The stocks essentially trade to screw with the masses. Having a stop-loss too tight against the high and you are going to get stopped out. Shorting above vwap without a solid game plan is a recipe for disaster.

This bring to the shorting opportunity as it comes into the high of day after the initial flush down. You want to be scaling into the short with a stop-loss about 20% of current range above the high. E.G. In this case it had moved just over $1.50 so you want to be stopping somewhere in the 12.70s (HOD 12.44 and 12.50 sig level from premarket). So you would put on max size in the high 12.5x zone.

This trade initiates as a scalp against the dominant trend. You want to be taking profit and downsizing pretty quickly! While initiating as a scalp it can turn into a reversal trade. So after taking off half reconsider adding it back on appropriate price action. Especially if it gets below vwap (which in this case it didn't).

This setup is the epitomy of picking appropriate prices to initiate a trade, despite being well against the predominant trend for the day it still yielded around 2-5R. Really good reinforcement of how important it is to pick prices.

Playbook Review: 10-19-2015 WTW

Title: Knowing when to get long the massive gap-ups on dips on the open.

Strategy Description: About 2 months ago gaps of 100%+ were fading off pretty easily. They would have their first down move then the bounce would fail roughly around vwap and then at some point around 9:50-10:15 you would know they were absolutely toast and have confidence in a fade off for the rest of the day. But the market changed somewhat and they started having a second wave higher after the open, after having an initial move down.
Now I would just add that there hasn't been any "true trashy" companies gapping up 100% since then, so it is somewhat expected that they wouldn't completely fade off like the true trashy companies would. For example a $1b biotech company with 100% gap is a lot more likely to find some support and stage a decent bounce at some point compared to a shitty $100m company.
For this reason alone it is worth considering that WTW may have a secondary wave up.

Now consider the news on WTW, the fundamentals, and the price action. It has a >20% short interest. It has >90% insitututional ownership (thus making the float low). It has a billionaire investor (common news for the monster runners). The premarket price action has not been particularly weak (a lot of the all day fader ones have already crapped out by the time the market opens). All of this doesn't exactly paint a picture for  something to throw size at near the lows on the open!!! It actually suggests that it might be worth trying to buy a flush on the open for at least a bounce to vwap. Even the crappy ones will have some sort of bounce! Then see how it behaves around vwap, and wait until more time has passed to make a decision if it's going to fade or not. Also the volume is indicative of strength.

Remember that a lot of the time it is natural to have some sort of flush as some people take profit on the gap up. This profit taking isn't indicative of the final trend.

Looking at the intraday chart you can see it held premarket support pretty cleanly before effectively rocketing back up to the highs after a slight pause near vwap.

Trading Review: 10-19-2015

Main Account: +$2014. Started off not the greatest by fighting the WTW up move in the premarket with too much size. There was a perfect opportunity to stop out of my starter; and if I had stopped out I wouldn't have added where I did. I really just wasn't thinking enough and was too biased. More WTW commentary in back account discussion.

Think in general I did a good job of not getting too much tunnel vision on WTW. Was still searching for other ideas and came across some good ones. In particular there was one that stood out, that I didn't actually end up taking. But good effort being prepared for it.

Really solid consistency again today as well. Both VRX and FPRX didn't really work out too well but got away quite decently by focusing on good low risk trading (good entry on FPRX saved me, and taking profit early on half saved me on VRX).

Back Account: -$352. Got myself in a real bind quite early on being down about 2k. In general was far too biased, and wasn't picking my prices at all. Did a good job of reversing my psychology and beginning to pick prices within the trend to make it back on the long side. A real shame though because this was such a good opportunity. Could have easily been a 4-5k day in my back account if I hadn't tried so hard on the open.

In general not only did I not pick my prices to trade off and chased the price, but I overtraded it somewhat. This is pretty evident from the fact that I lost $100 on the stock but used about $250 of brokerage.

I actually had the completely wrong read on it initially. I attribute part of this to lack of preparation. I knew it was going to be a crowded short (FS>20%), but didn't really adjust my behaviour. AND I didn't notice that the insitutional ownership was >90% thus making it a low float as well as high short interest. This is really a game changer. Ultimately had the wrong read, which happens sometimes but is partially attributable to poor preparation. So am pretty annoyed about that.

The severe under-performance on the open comes from a couple of factors. The first is simply that I had the wrong read (as above). The second is that I knew it was a really really good opportunity so I felt pressured to try and crush it. Without this pressure I wouldn't have been overtrading it and wouldn't have added so close to the lows prior to 10am.

The whole time I was adding to my short near the morning lows I was preparing for a rip your face off move back to the highs... And it ended up coming... I had a good stop-out, but still...

Another comment is that I didn't lose too much on the short side in my main account, but lost quite a bit in my back account. I have found this to be the case in the past when I'm trying to push it too hard. This reinforces the idea that I was feeling pressure to crush it.

Again, another comment is that there was intraday short opportunities. Obviously I did a great job of crushing it on the long side once it started trending... But shorting into the first test of the high of day was a great opportunity on the short side (which I potentially would have nailed if I hadn't been just stopping out of short).

Playbook Review: NUGT 10-16-2015

Title: Tight Consolidation on Wide Ranging ETF

Strategy Description: Pretty basic play that I have nailed quite a bit. But just wanted to add in some comments on this bear flag which made me somewhat uncomfortable despite having sized down, and then how the bear flag can be used to get more size.

$50 was a really key level on NUGT in the morning and it started to trend down consistently towards $50 so a perfect time to get short with 50c risk (or less). At least half was covered on the move to $48 as it was a bit extended. In hindsight probably should have covered a little more because pretty obvious would get an opportunity to reshort.

As NUGT rebound it starts to slowly defy the trend, but still well below $50 with the general idea in tact for a consistent fade off until the end of the day. The gearing action starts and then as it fails that is the opportunity to reshort full size. With a trailed stoploss.

Playbook Review: ZFGN, PWR: 10-16-2015

Title: Shorting New Lows, Nuances Around the Trade.

Strategy Description: A stock within a intraday downtrend that is constantly making new lows is a decent short candidate. However there are particular distinguishing factors that determine how to play it.

(1) A new low is always confirmation of the trend.
(2) However, a new low isn't necessarily a reason to establish a new position, but it is usually a reason to establish an add (a momentum lot) to take profit on pretty quick smart.
(3) The behaviour around the lows before it breaks determines whether you should be shorting full size on new low.

Compare ZFGN around midday as it tightened to it's lows, right on the downtrend low and below the morning range to ZFGN around 10:30ish as it made a new low and to PWR as it made a new low. All of those were certainly validation of the downtrend, but only the first example was a signal to establish a full position size. The other 2 examples you want to be shorting full size on either retests or on pops of some sort. And adding a momentum lot (of roughly 1/3 or so) to have profit taken quickly on the new low.

ZFGN:

PWR:

Playbook Review: GTATQ 10-16-2015

Title: OTC Bounce Play

Strategy Description: This is one of the plays that I have a huge edge in and used to dominate this play when it occurred. Haven't seen it for a while so good to go through this one to keep familiar with the pattern.

Looking for an OTC stock down 50% or more all in a short space of time. Reading the tape start to identify held bids. Strategy is long above held bid, stop below.

Generally speaking you want to be careful about adding into strength. In this case it worked out only after a half an hour consolidation or so... So before that you want to be buying weakness and selling pops, locking in some profit and then adding.

In this case there was 1 fakeout, combined with massive volume which is unfortunate because that's probably where you would have got some decent size (unless the tape was saying something else but idk because I wasn't watching the tape). Remember that they don't have to bounce, so you could be buggered if you add, add.

However a pretty typical max upside target for the bounce is around 50% retracement of the crash, so provided focus on buying weakness and not getting stopped could capture a great move.

Playbook Review: PTCT 10-16-2015

Title: Recognising when something is a really good short, but not to chase weakness.

Strategy Description: PTCT is within a longer term downtrend, and had bad news come out in after hours. However it never even saw a downtick after the gap down until it hit green on the day. This is the first sign that it's a crowded short.

Second sign is the tape mentioned in the anti-playbook post. Basically it just wasn't rolling over and being weak on the open.

Third sign is simply the short interest being really high.

Accordingly, need to be shorting strength into levels rather than shorting weakness.